The PayLater insights

paylaterIn the span of about a month and a half (24 May 2013 – 10 July 2013), bidorbuyers made over 100 purchases to a value of over R220,000 using the PayLater method of payment. On average, each purchase was made up of about 1.5 items. Most buyers bought one item on credit, while some opted to fill their baskets with two to seven items.

(Just to remind you, PayLater allows buyers to finance their purchases on bidorbuy with a personal loan of between R500 and R8,000. The loan needs to be repaid over three to six months at a 19% annual interest rate. )

The figures are rather impressive, bearing in mind that these are the very early days of PayLater. They are also representative enough to give an insight or two into the (initial) behaviour of bidorbuyers when it comes to shopping on credit.

Insight number one: About 90% of credit-financed purchases were under R5000. Of that, about 33% were under R1000. That seems to indicate that shoppers are mindful of the fact that every loan needs to be repaid and are adjusting their PayLater behaviour accordingly.

Insight number two: When buying on credit, shoppers on bidorbuy are most likely to buy (in this order):

  1. Cell phones and smartphones (BlackBerry, iPhone, etc.)
  2. Tablets (mainly Android)
  3. Collectable coins (especially Mandela coins)
  4. Watches (mainly men’s)
  5. Clothing and accessories (ladies’ shoes, handbags)
  6. Gems
  7. Jewellery (mostly rings)
  8. Household items (carpets, large appliances)
  9. Laptops
  10. TV sets

Insight number three: Lastly, and most importantly, the initial uptake of PayLater shows that bidorbuy did well (even if we say so) to introduce shopping on credit.

By now, you are probably wondering how you can buy life’s necessities (or little luxuries) on credit with PayLater.

The PayLater application procedure is simple. You need to fill in your contact, employment and banking information, and then confirm that you are really you by entering a one-time PIN sent to your cell phone. During normal business hours, the approval takes between several minutes and one hour.

Mind you, it’s not a given that you will get the loan to the amount you asked for, or that you will get a loan at all. So, just in case, apply before making your purchases. That way, you will know exactly what you have at your disposal.

At the moment, more than 350 sellers offer about 74,000 items on credit. That figure (74,000) only takes into account listings priced between R500 and R8000 by sellers who offer PayLater. However, the number of items available on credit is actually much higher, because:

  • The moment an auction item reaches R500, it may qualify for PayLater.
  • You may be able to pay with PayLater a part of an item priced over R8000.
  • An order made up of several lower cost items that reaches R500 (with shipping) may qualify for PayLater. For example, one buyer recently bought from a PayLater seller: one movie on DVD, one music CD, one heater, one bottle of shampoo and one moisturizer. The buyer was able to finance this purchase on credit, even though each individual item was well under R500. Since you can buy so many things on bidorbuy for under R500, filling your shopping basket before proceeding to the check-out can increase the number of items available on PayLater exponentially.

So, sky’s the limit (figuratively speaking)!