Billionaire Bassim Haidar to launch BNPL e-commerce product in South Africa

By David Whitehouse
Posted on Tuesday, 27 September 2022 06:00

Billionnaire Bassim Haidar (photo: twitter)

Bassim Haidar is planning to launch an African e-commerce buy now pay (BNPL) later product for small and medium-sized businesses (SMEs).

South Africa will be the first market, with a launch planned for the second quarter of 2023, Haidar tells The Africa Report. He also wants to roll out the product in Nigeria.

The product will provide e-commerce suppliers with a payment guarantee and allow SME purchasers to spread the bill over three or four months. That can make a major difference to businesses as they can buy new equipment as soon as it is needed. “They can boost their revenue today, not in six, eight, or ten months’ time,” Haidar says.

“Access to that small bit of extra liquidity and a bit of flexibility in their cash flow means they can seize opportunities and take risks that would otherwise be out of reach.”

BNPL, according to Worldpay, will be the world’s fastest-growing payment method between 2021 and 2025. African players are starting to explore the market. E-commerce player Jumia partnered with the valU platform in 2021 to offer BNPL services to consumers in Egypt. In South Africa, the fintechs Merchant Capital and Payflex are trying to exploit the potential.

Payflex, South Africa’s largest BNPL provider, has said that e-commerce merchants report the value of orders increasing 30% when they offer a BNPL option.

Information pitfall

Haidar, born in Nigeria to Lebanese parents, has a range of businesses operating in fintech, logistics, energy, telecoms and engineering. His biggest business is Optasia, previously called Channel VAS and based in the United Arab Emirates. Optasia supplies mobile financial and fintech services and has revenue of about $1b.

BNPL, Haidar argues, faces potential pitfalls as a financing method in emerging markets. The main issue is reliance on large amounts of data to determine creditworthiness. It is very hard to collect this data where many people don’t have a bank account or an official financial footprint, he says, pointing to Nigeria, where over 100 million people don’t have any form of ID or a financial data trail such as in the West.

Distance is also a key factor. Many business owners are far from the nearest physical bank.

“When all you need is a small loan, the cost of travelling to the bank will outweigh the benefit. This is a big part of why more than half of adults in Nigeria don’t ever open a bank account,” he says. Banks, for their part, face acquisition costs for customers which are far too high given the small loans they need, he adds.

  • Some worry about BNPL leading customers into a vicious cycle of debt, he says, particularly in poorly regulated markets. Having a large pool of customer information can avoid that danger, he argues.
  • Optasia, he says, has a competitive advantage due to partnerships with mobile network operators, wallet operators, and financial institutions which allows credit-scoring.

Bottom line

Haidar is confident he can bridge the information void and turn BNPL into a viable African business.

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