Factors that affect the adoption of buy now pay later technologies amongst South African SMME's

Abstract

The adoption of Buy-Now-Pay-Later (BNPL) financing among Small, Medium, and Micro Enterprises (SMMEs) in South Africa is an emerging trend with significant implications for business growth and financial inclusion. Despite the global rise of BNPL as a flexible payment solution, its adoption within the South African SMME sector remains limited. This study explores the key factors influencing BNPL adoption by drawing upon the Unified Theory of Acceptance and Use of Technology (UTAUT) framework. A quantitative research approach was employed, utilizing survey data collected from South African SMMEs operating across various industries. The study investigated the roles of performance expectancy, effort expectancy, and social influence in shaping the behavioural intention to adopt BNPL financing. Additionally, demographic variables such as age, gender, and business experience were analysed as potential moderators of these relationships. The findings indicate that performance expectancy and social influence significantly impact BNPL adoption, with effort expectancy playing a lesser role. Younger and more tech-savvy entrepreneurs demonstrated a higher likelihood of adoption, emphasizing the role of digital literacy in financial technology acceptance. The study also highlights the challenges faced by SMMEs, including regulatory uncertainties, financial literacy gaps, and accessibility constraints, which hinder widespread BNPL adoption. The research contributes to both academic literature and practical applications by providing insights that can guide BNPL providers, policymakers, and industry stakeholders in fostering a more inclusive financial ecosystem. It underscores the need for targeted financial education programs and regulatory frameworks that support responsible lending while promoting digital payment solutions tailored to the needs of SMMEs.