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The rapidly growing buy-now-pay-later (BNPL) industry is facing a big regulatory shift, with the National Credit Regulator (NCR) ordering providers to begin reporting consumer payment behaviour to credit bureaus from February next year. In a formal notification to the industry, the NCR said it had assessed the BNPL business model to determine whether it falls within the ambit of the National Credit Act (NCA) and “concluded that BNPL agreements do not constitute credit agreements at inception. However, where default charges or fees are levied following consumer default, such agreements may constitute incidental credit agreements as contemplated in the NCA.” The NCR has signed a memorandum of agreement with the South African Credit and Risk Reporting Association (Sacrra) and the Credit Bureaus Association. The parties have formed a BNPL subcommittee, which will determine the manner and form in which BNPL providers are to submit consumer information. The NCR’s decision comes as industry has been lobbying for the sector to be brought into a formal regulatory framework — including the reporting of repayment behaviour to credit bureaus — even as it argues that BNPL should not be classified as conventional credit. The BNPL companies have welcomed the latest move, saying they have been preparing for it for months and broadly welcome the greater transparency, arguing that formal reporting could help address concerns about hidden debt while allowing responsible consumers — particularly younger and credit-inexperienced South Africans — to build formal credit histories. Happy Pay CEO Wesley Billett said the NCR’s February 2027 deadline would not materially change the company’s operations because it — like other major BNPL providers — had already been reporting repayment information to Sacrra. “The key change is that this information will begin appearing on consumers’ credit profiles from February 2027. The reporting itself is already live and ongoing,” Billett said. PayJustNow COO Dean Hyde said his company had been submitting data to Sacrra from April this year.“PayJustNow has always supported the reporting of consumer payment data to credit bureaus. The traditional reporting framework did not accommodate BNPL data, but we have proactively been submitting our data to Sacrra since April 2026,” Hyde said. BNPL allows consumers to receive goods immediately and spread interest-free payments over a short period: typically six weeks, three months or six months. However, missed instalments can result in heavy penalties.The market has expanded rapidly in recent years, with millions of people using BNPL, which is widely available across online and physical retail channels, spanning categories from fashion and homeware to tyres and electronics, while new areas such as health care are emerging as areas of growth. TransUnion’s Q4 2025 Industry Insights report found that 57% of South African consumers surveyed held a BNPL product, while 36% had used BNPL multiple times during the previous 12 months to pay for goods and services. That convenience is also at the heart of concerns about affordability and over-indebtedness. TransUnion’s research shows that about 40% of BNPL users fall into thin-file or underserved credit segments. It also said BNPL is emerging as more than simply another payment option, describing it as a response to changing consumer expectations, the growth of e-commerce and mounting pressure on household budgets. Billett said the new reporting regime could help address those concerns by giving lenders a fuller picture of consumers’ financial obligations. “Once BNPL repayment data is visible across the credit ecosystem, lenders will have an even more complete picture of a consumer’s existing financial commitments,” he said. “Greater transparency benefits everyone; it helps lenders make better lending decisions while giving consumers confidence that the industry is operating responsibly.” BNPL operators have argued that their offerings function primarily as payment tools rather than loans, with no interest charges or fees — provided customers repay them on time. They want a framework that recognises the differences between short-term instalment payments and conventional lending. Both Happy Pay and PayJustNow argue that consumers who use the products responsibly should benefit from having their repayment behaviour formally recognised. Hyde said consumers who repay their BNPL commitments responsibly will have the opportunity to build a stronger credit profile through their repayment behaviour. “While missed payments and defaults will be reflected where applicable, PayJustNow’s consistently low default rate of below 2% means we expect the overall impact to be positive,” he said. Billett echoed this view, saying the biggest beneficiaries would be responsible BNPL customers. “Making repayments on time will contribute to building a positive credit profile, particularly for younger South Africans and those with a limited credit history,” he said. “For many South Africans, BNPL can become an accessible first step into the formal financial ecosystem, helping them establish a positive repayment track record and broadening access to financial services over time.” The flip side is that consumers who repeatedly fail to meet their obligations will increasingly face consequences when applying for other forms of credit. “Customers who repeatedly miss repayments should expect that behaviour to be reflected on their credit profile, just as it is with other financial obligations. We believe responsible borrowing should be recognised, while persistent nonpayment should have appropriate consequences.” This two-way benefit — rewarding responsible behaviour while providing greater visibility of financial stress — is likely to become one of the strongest arguments for formalising BNPL reporting. The regulatory change is also unlikely to result in a major technology or compliance burden for the largest providers. Billett said Happy Pay had already invested in the necessary infrastructure to report repayment information to Sacrra. “The February 2027 implementation timeline doesn’t require any significant operational changes for us,” he said.Hyde said PayJustNow had reached a similar position. Business Times
