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Buy now pay later: Can it work in Nigeria and Africa at large?

By Guardian Nigeria
14 November 2022   |   1:14 am
Imagine a life where funds don’t stop you from buying all you need immediately. Is there anything better? I bet not! A lot of times, we’ve had to let go of certain wants and needs just because we can’t afford them at that moment. This can be very painful, especially if those items are basic…

A worker scans the barcode of a stock item inside a distribution warehouse in Lagos, Nigeria. Photo: Bloomberg

Imagine a life where funds don’t stop you from buying all you need immediately. Is there anything better? I bet not! A lot of times, we’ve had to let go of certain wants and needs just because we can’t afford them at that moment. This can be very painful, especially if those items are basic necessities.

Say hello to a payment plan that allows consumers to buy now and pay later.

Here’s the best part: you won’t even have to pay interest fees! Now, your quality of life doesn’t have to be dependent on your financial situation. With this, you can enjoy the luxury of living a comfortable life regardless of your current financial status.

Read on to find out more about the life-saving service of ‘buy now, pay later’.

What is Buy Now Pay Later?

Buy now pay later is a payment structure that allows consumers to purchase an item and pay for them in the future, often interest–free.

Buy Now Pay Later is an attractive form of financing for every consumer. In highly populated African countries like Nigeria, Ethiopia, and Kenya, this emerging trend may be the gateway to immense financial development. In Africa, the buy now, pay later option is a lot easier to access, compared to qualifying for credit card use. In fact, with buy now pay later as a possibility, more people are looking into holding crypto cards, virtual dollar cards, and virtual debit cards instead of regular ATM cards.

The operating model causing a stir across the world is the ultra-simple “Pay in four” concept. Rather than paying for something immediately, you can pay in four timed and interest-free installments.

Although a wide range of products are described as ‘Buy Now Pay later’, here are the common features:

  • Short-term financing
  • Interest-free payment
  • Items with low or modest ticket prices.
  • Specificity in duration, location, and item
  • Offered or activated at a point-of-sale (whether in-store or online).

Buy Now Pay Later In Africa

In Africa, Buy Now Pay Later is quickly gaining traction.

PayNXT360, a strategy research and consulting firm offering business intelligence posits in its ‘4th Quarter 2021 Buy Now Pay Later survey’ that the Buy Now Pay Later payment industry in Africa and the Middle East will surpass $7, 187.8 million in revenue this year. The research firm pegs the growth rate at 99.8%.

This recent survey report revealed that the region had recorded strong growth over the past year. According to PayNxt360, this growth was supported by a surge  in e-commerce penetration brought about by the COVID-19 pandemic.

These figures reveal that Africa’s buy now, pay later market is developing.

Buy Now Pay Later Providers In Nigeria and Africa

Already, across Africa, Buy Now Pay Later providers are springing up.

Here are a few notable options:

  • PayQart, a Nigerian brand, allows customers to pay for goods and services in installments over a six month window.
  • The South African company, PayJustNow, allows you to divide and spread payments over three months, with zero fees or interest. To achieve this, the company partners with a wide range of retail outlets and producers.
  • Carbon Zero is a Nigerian payer offering interest-free installments over three months.
  • The Kenyan Buy Now Pay Later start-up charges merchants a transaction fee and customers a monthly interest rate.
  • South African fintech LayUp Technologies is digitalizing the lay-by agreements market (shops agree to keep goods for up to six months while buyers pay in installments-a sort of Pay-Now-Buy-Later).

In July 2021, Jumia partnered with ValU, a Buy Now Pay Later platform targeted at the Middle East and North Africa, to offer Buy Now Pay Later services. The arrangement was aimed at linking ValU’s platform to JumiaPay, Jumia’s electronic payment channel.

To properly understand payment gateways, think of the steps to follow on how to buy bitcoin in Nigeria  or how to buy ethereum in Nigeria.

In spite of these recent strides, paying in installments is not strange to Africans. Traditionally, Africans utilize a lay-by payment method to purchase  goods and services that are otherwise unaffordable.

However, this works in reverse: Pay Now, Buy Later.


Africa is very familiar with lay-bys or lay-aways. In plain terms, this is just a variation of Buy Now Pay Later. However, lay-bys require a minimum down payment of 20% and the ‘pay later’ window must not exceed three months.  Furthermore, the store keeps the item until the full payment has been made

Rather than buy now, pay later, it becomes ‘pay-now-buy later’.

For instance, Spredda –the Nigerian online marketplace- offers a lay-by option at checkout. Thankfully, there is a high chance that we will see a significant shift from lay-bys to Buy Now Pay Later in the future.

The potential of Buy Now Pay Later in Africa

There’s reasonable ground to believe that Buy Now Pay Later will boom in Africa.

Buy Now Pay Later is generally more common with younger people and the population of people in the continent is heavily skewed in this direction. With many economies in the doldrums, the Buy Now Pay Later offer becomes impossible to ignore.

For example, most financial institutions only offer traditional credit to about 5% of the country’s population. As a result, there is a huge market for Buy Now, Pay Later services which can service the other 95%.

The challenges of Buy Now Pay Later

Of course, there are worries about the sustainability of Buy Now Pay Later services in Nigeria and Africa. To even the scales,  Buy Now Pay Later providers rely on effective identity verification networks and a thriving consumer credit culture.

According to a report by VerifyMe Nigeria, a digital identity and verification service provider, over 500 million Africans do not have any form of recognizable legal identity. For example, over 100 million Nigerians lack access to any form of recognized identification.  Interestingly, identity verification is also crucial when trading on reliable crypto platforms that offer crypto cards and allow you to buy bitcoin in Nigeria.

Thankfully, emerging government policies on the use of national identification numbers will serve to solve the identity problem.

The Takeaway

It’s no longer news that “Buy now, pay later” is gradually being adopted by more people in Africa. This is not surprising, considering how stressful it is to apply for and get loans in this part of the world.

However, there are concerns about the sustainability of this payment structure. For one, Africans generally do not mind accumulating individual debts. Another prominent issue is that a good number of Africans do not have any form of recognizable legal identity. These may become major setbacks to the effectiveness of this payment structure.

On the bright side, “Buy now, pay later” has the potential to thrive in Africa, especially in a country like Nigeria where traditional credit is inaccessible to about 95% of the population. “Buy now, pay later” has a huge market to cater to, as more people are turning towards alternative sources of credit.