Buy Now, Pay Later Is Moving Into Your Corner Shop. Are You Ready?
Buy Now, Pay Later is the fastest-growing payment segment in Africa right now, and it is moving aggressively off e-commerce screens and into physical stores, market stalls and small merchants.
Introduction
Walk into a mid-size electronics shop in Lagos or Nairobi and ask whether they offer instalment payments. Most owners will laugh it off as something reserved for big retailers or formal credit institutions. That perception is about to become expensive.
Buy Now, Pay Later is the fastest-growing payment segment in Africa right now, and it is moving aggressively off e-commerce screens and into physical stores, market stalls and small merchants. The businesses that understand how it works will gain a serious competitive edge. The ones who dismiss it will watch customers walk to whoever does offer it.
The Size of What's Happening
The numbers are stark. According to a January 2026 report from ResearchAndMarkets, Africa's BNPL market is expected to reach $6.5 billion in 2026, growing 25.7% year on year. Between 2022 and 2025, the market grew at a compound annual rate of 30.5%. By 2031 it is projected to be worth $16.8 billion.
This is not theoretical future growth. It is happening now, in markets most relevant to African SME owners. Kenya's BNPL market alone is expected to hit $1.39 billion in 2026, up 24.7% year on year, and is forecast to reach $3.69 billion by 2031. Nigeria's BNPL market is projected to grow 20.6% in 2026 to reach $1.88 billion, climbing to $3.96 billion by 2031.
The driver is not a sudden shift in consumer behaviour. It is the infrastructure catching up. Mobile money platforms, e-commerce networks and telecoms companies have spent years building the rails. They are now running BNPL products on top of them.
How It Works, and Why Merchants Get Paid Upfront
The core mechanic of BNPL is simple: the customer buys something today and pays in instalments over time. But here is what many merchants do not realise. Under most BNPL models, the merchant receives the full payment upfront. The BNPL provider takes on the credit risk and recoups the money from the customer over the agreed repayment period.
This means BNPL is not the same as offering credit to your customers yourself. You are not waiting to be paid. You are not taking on any default risk. A customer walks in, selects a product worth 20,000 Kenyan shillings, uses Faraja through their Lipa na M-Pesa, and pays in three instalments. You, the merchant, receive the full 20,000 shillings immediately.
The BNPL provider charges the merchant a small percentage fee, typically between 2% and 5% depending on the platform and market. In return, you remove the biggest barrier to a sale: the customer not having the full amount available right now.
The Players: Who Is Doing This in Africa Right Now
M-Pesa Faraja (Kenya). Safaricom and EDOMx's Faraja product is arguably the most significant BNPL development for African SMEs. It operates directly within the Lipa na M-Pesa ecosystem, meaning any merchant already accepting M-Pesa payments can potentially offer BNPL to their customers. Customers pay later and the merchant receives the full amount upfront. This is live now, embedded in one of the world's most widely used mobile money platforms.
CredPal (Nigeria). Founded in 2017 and having raised over $19.7 million in funding, CredPal is Nigeria's leading BNPL provider. It partnered with Jumia Nigeria in May 2024 to offer instalment payments at checkout, a partnership that has driven significant adoption. CredPal focuses on both online and offline retail ecosystems.
Lipa Later (Kenya, Uganda, Rwanda). Lipa Later has expanded across East Africa and moved beyond retail into sector-specific BNPL including healthcare and education financing. In August 2023, Mastercard partnered with Lipa Later to expand its reach across Kenya, Rwanda, Uganda and Nigeria.
Payflex (South Africa). South Africa's BNPL pioneer has integrated into both major online retailers and physical stores. BNPL is becoming a standard payment option at South African checkout, sitting alongside card and EFT. Payflex has also begun targeting small businesses with BNPL products for B2B purchasing.
M-Kopa and SpotIt (East Africa). These platforms extend instalment financing to smartphones, solar systems and other assets using a pay-as-you-go model that is particularly powerful in markets where customers need to build up assets but lack upfront capital.
What This Means for Your Business
The practical implication for an SME owner is straightforward: BNPL raises average transaction values and reduces abandoned sales. A customer considering a 15,000 shilling purchase who only has 5,000 in their wallet today walks away empty-handed. A customer who can spread that purchase over three months buys today.
In South Africa, Payflex has reported that BNPL integration significantly increases average basket sizes among retailers, particularly in fashion and electronics, two categories where price sensitivity is high and competition is fierce.
Beyond basket size, BNPL also brings a new category of customer through your door. The model is particularly powerful for underbanked consumers who cannot access credit cards but have a mobile money account and a steady, if irregular, income. This is a significant proportion of the adult population across Sub-Saharan Africa, where 49% of SMEs operate without access to formal financial services.
The Regulatory Picture
It would be incomplete to discuss BNPL growth without flagging the regulatory shift underway. Regulatory bodies across Africa are extending consumer credit and digital lending frameworks to cover BNPL products, with a focus on licensing requirements, disclosure obligations and affordability assessments.
In Kenya, the Central Bank now requires all digital loan providers, including BNPL platforms, to obtain a licence. Nigeria has brought BNPL providers under the Federal Competition and Consumer Protection Commission's digital lending framework. Egypt's Financial Regulatory Authority has introduced fintech licensing requirements.
What this means in practice is that the market is consolidating. Smaller, undercapitalised BNPL providers are struggling to meet the new requirements. The winners will be the well-capitalised platforms with bank partnerships, which is good news for merchants because these platforms will be more reliable and better integrated with the mainstream payment infrastructure.
How to Get Started
If you're a merchant in Kenya, Nigeria, South Africa, Ghana, Uganda or Rwanda, here is the practical path forward:
- Talk to your current payment provider. If you accept M-Pesa payments in Kenya, ask specifically about Faraja integration for your merchant account. Safaricom has been actively pushing this with merchants.
- In Nigeria, contact CredPal or Carbon about merchant onboarding. Both have dedicated merchant programmes and can integrate with existing POS or e-commerce setups.
- In South Africa, Payflex has an onboarding process for SME merchants. Integration can be completed relatively quickly for both online and physical retail.
- In Uganda and Rwanda, Lipa Later has expanded its merchant network significantly and has healthcare and education sector options if your business operates in those verticals.
- Make sure your POS or business management system can record BNPL transactions separately from standard cash and mobile money sales. This matters for cash flow forecasting and tax records.
The Bottom Line
BNPL is not a trend you can afford to ignore if you run a retail or services business in Africa. It is becoming a default payment option in the same way M-Pesa became the default payment option. Gradually, then suddenly.
The market is growing at 25.7% per year and will more than double by 2031. The infrastructure is already live in the platforms you use. The customers are ready. They are already using BNPL where merchants offer it.
The question for every African merchant in 2026 is not whether to get involved with BNPL. It's how quickly you can get set up before the competitor across the road does it first.
Sources
* ResearchAndMarkets / GlobeNewswire, 'Kenya Buy Now Pay Later Business Report 2026', February 2026
* Ecofin Agency, 'Africa's Buy Now, Pay Later Market to Triple to $16.8 Billion by 2031'
* FintechFutures, 'Africa Buy Now Pay Later Market Report 2025', March 2025
* Safaricom / EDOMx, Faraja BNPL product documentation
* Mastercard press release, Lipa Later partnership, August 2023
* Mordor Intelligence, 'Middle East and Africa Buy Now Pay Later Services Market' (2025 to 2030)
