Being able to afford something is amazing but sometimes you can’t make a purchase on the spot. There is a solution to this called buy now, pay later. For consumers, this solution is great because they can get their desired purchase without spending a lot of money.
For businesses, this is also a great solution because you can move a product and be secure in the fact that your customers will pay for it in instalments.
Buy now, pay later is a short-term loan that allows you to pay for purchases (services or goods) over time. These instalments that you pay do not come with any interest and you are given a certain amount of time to finish the payment.
There are many buy now, pay later apps/platforms that you can utilise as a consumer and as a business. According to experts, the buy now, pay later market in South Africa is set to reach $1,7 billion in 2024. This makes it a great opportunity for businesses.
In this article, we are going to look at Float and Payflex, two of the biggest buy now, pay later platforms.
Float
Float is a buy now, pay later platform that lets you purchase an item and split the instalment costs. The platform offers customers up to 24 interest-free monthly instalment opportunities using the limit on your existing Visa or Mastercard credit card.
Float does not require any application and will not perform any credit checks on your profile. Float is currently available in many stores in South Africa including Edgars, iStore pre-owned, Samsung online store, Leroy Merlin, Cape Union Mart and Dial-a-bed amongst many others.
How Do Float Payments Work?
When you purchase something using Float, the first instalment is charged to your account on the same day. After that, the instalments will be debited from your account on the same day until your repayments are finished.
Float pre-authorises the purchases against the credit you have left to spend on your credit card. This is to ensure that you do not overspend and still have money to pay your instalments. Once the reserve has been made on your card, the amount of the purchase will reflect. As you make payments, the purchase amount decreases until you are finished.
A benefit to using Float is that you can pay your instalments early. If you want to settle early, you can contact Float at support@float.co.za. If you need to change your credit card, you can change your credit card details anytime on the Float Shopper portal.
If you are a merchant and want to integrate Float into your store, you will gain access to Float’s over 5 million customers, big orders, and guaranteed repayments.
Now, Float is not the only buy now, pay later platform operating in South Africa. Next, we are going to look at Payflex and how it works.
Payflex
Payflex was launched in 2018 through pilot programmes. In 2019, the Payflex solution was integrated into the online shopping platform Superbalist. The platform has over 200 merchants using its tool for their customers.
Much like other buy now, pay later Payflex offers interest-free instalments with your purchases. If you use Payflex five or more days before your payday (of that month), the second payment will be on the same month. Your first instalment is on the day of the purchase. If you make the purchase within five days of your payday, the second instalment will only be charged on the following month.
When you choose Payflex as your payment option at checkout, you will need to create a Payflex account. You need to provide your ID number, and you will be assessed in seconds. You don’t need to provide any documentation; however, your credit record and credit rating must be very good.
Your spending limit on Payflex is decided by your payment behaviour. If you keep your repayments up, then your spending limit will be increased. You can check your spending limit in the Payflex Customer portal.
To make a payment on Payflex you can use any Visa, Mastercard or Amex card (debit, credit or cheque). You can buy using Payflex at stores such as Woolworths, Takealot, Cape Union Mart, Makro and Sorbet amongst many others.
For businesses, you can sign up for Payflex integration by filling in the online form. You can leverage Payflex online or in-store and potentially boost your cash flow, grow your customer base and increase your sales.
Payflex presents itself as another great option for both customers and merchants. Both these platforms have similarities and differences; however, they are not the only buy now, pay later platforms in South Africa.
Other Buy Now, Pay Later Platforms
Some of the most popular buy now, pay later platforms include:
- Afterpay
- PayJustNow
- Payfast
- MoreTyme
- Happy pay
- Mobicred
All these platforms offer interest-free instalments which help you buy whatever you need. For businesses, there are a range of benefits to using buy now, pay later platforms within your business.
If you need more information about digital payments, read about digital payments for township entrepreneurs. For actionable business advice, visit SME Advice to speak to one of our experts.
