PayJustNow’s Dean Hyde on the merchant-funded model, the customers banks overlook, and why they pay back.
Katlego Sekhu
For millions of South Africans, the problem has never been willingness to pay. It is the lack of a way in. Traditional lenders rely on credit histories that many people have never had the chance to build, which leaves them locked out of the formal credit market.
Buy now, pay later is starting to change that, and not in the way its critics assume.
Kaya BIZ with Gugulethu Mfuphi spoke to Dean Hyde, Chief Operating Officer at PayJustNow, to understand how the model works and what new research reveals about who is really using it.
No interest, no fees, so where’s the catch?
Hyde is firm on one point. “It’s definitely not credit,” he says. Consumers pay no interest and no fees. A R100 purchase is split into three equal instalments, one third upfront and the rest on the customer’s chosen pay dates, and the total never exceeds the cash price.
Why the merchant pays, not the customer
So how does the business make money? Not from the shopper, but from the shop. When a retailer offers PayJustNow at checkout, it gives up five to six percent of the sale, much as a store absorbs a fee when you tap a card. The customer still pays the full R100, the merchant nets around R94, and that cut is PayJustNow’s revenue.
Merchants accept this willingly. The option rescues sales that would otherwise be abandoned at checkout and tends to grow basket sizes, so the fee behaves more like a marketing cost than a loss.
That thin margin also keeps the model disciplined. With no interest to cushion it, PayJustNow cannot profit from a customer who falls behind. Hyde says default rates cannot run much above two percent, so lending people more than they can repay would sink the business rather than sustain it.
Building the profiles banks never would
This is where the ecosystem shift begins. PayJustNow starts from an unusual premise. “We assume that every South African who applies for a facility with us is trustworthy,” Hyde says. Facilities start small and grow as customers demonstrate reliable behaviour.
Research from credit bureau TransUnion gives the approach weight. It found that 37% of buy now, pay later users are either new to credit or underserved, the thin-file consumers who have rarely been given a chance to prove themselves.
And they tend to deliver. Hyde says these customers repay consistently, partly because they want continued access to a tool that few other lenders offer them. Every instalment paid on time quietly builds a profile that can one day unlock the formal credit market.
That is the real story beneath the industry’s “is it credit or isn’t it” debate. Buy now, pay later is not only a way to spread the cost of a purchase. For a growing share of South Africans, it is the first door into the credit system that has ever opened.
Hear the full conversation with Dean Hyde on the Kaya BIZ podcast.
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