For many young South Africans, the first step into credit no longer looks like a store account, a credit card, or a personal loan. It is increasingly digital, linked to a specific purchase, and built around smaller, more manageable commitments.

TransUnion research revealed that buy now pay later (BNPL) has the youngest consumer profile of all consumption credit products, with 37% of BNPL users belonging to Gen Z.

It also found that 16.5% of BNPL users are new to credit, while a further 19.7% are underserved consumers with limited credit histories.

Youth is not approaching credit recklessly

Dean Hyde, chief operating officer at PayJustNow, says TransUnion’s research suggests that young South Africans are not approaching credit recklessly.

The data instead points to smaller commitments, clearer repayment periods and products linked to specific purchases.

“The first credit experience for many young consumers is becoming more controlled and more intentional,” says Hyde.

“Many are beginning with transaction-linked products that have clear repayment structures. Confidence is built through smaller, well-managed commitments.”

Youth prioritise short-term credit

Hyde adds that according to PayJustNow’s data, BNPL average basket size is around R1 500, indicating short-term, planned purchases.

‘Pay in 12’, PayJustNow’s retail credit product, is being used for larger planned purchases, with an average basket size of around R2 500.

“Over the last 12 months, the average ‘Pay in 12’ basket size was 74.9% greater than the BNPL basket size,” he adds.

“Together, this suggests responsible experimentation with credit, where BNPL acts as an entry point for smaller, purchase-linked commitments, while Pay in 12 supports larger baskets in categories such as home, major appliances, furniture, and automotive.”

Flexi-loan products

Hyde notes that Finchoice is also seeing similar results. According to the digital financial service platform, people between the ages of 25 and 34, predominantly women, use MobiMoney, a short-term credit product with a three-month term, for immediate needs and emergencies.

Six-month flexi-loan products are also popular among consumers in their 20s and 30s, according to Finchoice.

Richard Eberlein, head of customer growth and engagement at Finchoice, says younger South Africans are becoming more deliberate about matching credit products to specific needs.

“Younger customers are not looking for one financial product to solve everything,” he says.

“They want choices that fit where they are in life, whether that is a short-term gap, an immediate household need, or a larger planned expense. The important change is that they are not treating all credit the same.”