🇿🇦 Get it Now, Settle the Bill Later

What laundry? The math-loving coder who figured out how to hack coin-operated washing machines from an image he saw on Amazon (step by step here) has been invited to present at DEF CON hacker conference in Las Vegas next week.

In this Open Letter:

• Big ticket power: Helping South Africans afford more nice things.

• Melon for Mahala, Red Bull’s business play & SA’s AI-powered salespeeps.

• Joining in: Guess who’s bringing the drinks for next week’s event.

• Most annoying last-mile habits: And the results are in.

• Startup fuel: Share this and get 100+ SA business ideas.

Together with

TRENDING NOW

When You Don't Want to Wait for Approval

Getting credit in South Africa isn’t that complicated if you have a good credit history. 

But for the 1.1 million South Africans newly joining the labour force each year, it's close to impossible. 

“Get a store card, buy some stuff and repay it” – sounds easy but it's a painstakingly slow process, and as far as user experiences go, not great.

Besides, what if you don’t need credit but simply need (or even want) to buy a big-ticket item every now and then without destroying your cash flow?

And it's not only new job market entrants. According to Tyme Bank, only 6.9 million South Africans have access to credit cards or similar, meaning 19 million employed and tax-paying South Africans do not have such a facility. 

How do they buy a large ticket item such as a TV, proper running shoes or even pay for a car service? 

Well, up until recently they couldn’t – unless they access exorbitantly high loans from unregistered credit providers.

Get it today, and pay for it later.

That’s why Buy Now Pay Later (BNPL) is such a game-changer for many South Africans – a trend we have highlighted before. But this time we’re diving in.

Often misunderstood as credit, BNPL, in most cases, is simply a financial product that allows customers to delay payments on items or services. This means people that they call a “thin file” consumer, one who doesn’t have a credit record yet, can participate in it more easily.

Yesterday, 5 years ago, three South Africans set off to change the BNPL game in SA after seeing it take off in other parts of the world, and PayJustNow was born. 

The solution splits your payment up into three very South Africanised transactions:

• Your first payment is at checkout or till point(Now)

• The next one is on the instalment date you picked when signing up (Now Now)

• And the final payment on the instalment date selected the following month (Just Now)

All at zero (interest-free) cost to the consumer. 

Another massive differentiator is that some BNPL players’ repayments are often positioned as smaller, but more frequent – i.e. fortnightly. Which is tricky for those monthly salaried consumers. If you’re struggling to afford one payment around payday, what are the chances the situation’s going to be any better 2 weeks later?

Is it more credit for people who already have too much credit? Not quite. As Mark explains here their solution is mostly used by people who don’t have credit cards.

It’s good for merchants too…

While consumers get interest-free flexible payments, merchants also benefit:

• A larger pool of customers can now afford their goods and services.

• Which helps them move more stock faster.

• And with circa 400% markups on higher-end clothing brands, taking a third of the payment on checkout, it already offsets a lot of risk.

And it has taken off

With close to 2 million end users and thousands of stores and online stores across a bunch of industries, including automotive, appliances, and even service-based providers like Game, Sportsman’s Warehouse, and Dial-a-Bed offering their solution as a payment option, things are going well for them. 

But it wasn’t always this easy. Learn more about how they got early traction and validation here and more in this week’s podcast:

• The surprising growth in e-commerce over the last 5 years

• The reality of launching a new product with low margins

• The four most crucial daily metrics in this type of business

This industry is growing faster than most and there are major opportunities here. To learn more about the market size and get a deep dive into this startup and all future startups we feature, sign up for The Open Letter Pro. 

Plus: When you sign up, you get to join our community of 40+ SA founders who get access to free consults, free in-person events, and free online events, all for just R250. Start your free trial today and come check it out!

IN SHORT

🪂 Extreme Entrepreneurship. South African students are getting a shot at international business stardom with Red Bull Basement, an initiative to help student entrepreneurs develop and pitch their business plans (with the help of AI) to take them to the finals in Tokyo in October.

🍉 Melon Testers. SA’s first digital telecommunications service Melon Mobile has launched another SA first — a free 14-day trial of their mobile network with 5GB Data plus unlimited Calls & Texts to see the network’s capabilities for themselves.

🤖 Sales AI. Nearly 85% of local sales teams are either experimenting with AI or fully integrating it into their sales processes according to a recent study by Salesforce.

🍎 Healthy Sixty60. After more than 10 years Discovery’s Vitality will no longer partner with Pick n Pay for its HealthyFood benefit. Instead from 1 September Vitality members will get the HealthyFood benefit when shopping at Checkers and Checkers Sixty60.

👩‍🚀 Jou Ma se Astronaut. The Mother City is set to host more than 2’000 professional astronauts for the 2024 International Astronomical Union (IAU) General Assembly. The event will be held on African soil for the first time in its 105-year history.

😎 The Stack. Founders need tools and suppliers they can trust. Check out our Founder’s Stack with project management tools like Notion and super-easy social payment collection with WigWag.

CHECK THIS OUT

Intercom for Startups

Join Intercom’s Early Stage Program to receive a 90% discount.

Get a direct line to your customers. Try the only complete AI-first customer service solution.

Apply now

ENGAGE

Community Meet in Stellenbosch

So many of you have already booked next week’s Open Letter community event, and we only have 20 spots left (book here)!

And guess what? We are making it even better! Introducing our event drink’s sponsor, CBC and Rekorderlig.

Octoco founder Heindrich De Lange is coming to tell us why Stellenbosch is such a great startup springboard for SA founders.

And, of course, the whole team and our entire community will be there at LaunchLab in Hammanshand Road, Stellenbosch next week on Tuesday (6 August 2024) at 18:00 sharp.

It’s R100 or free if you’re a pro member.

Coming Up This Week

• Wednesday 10-11: Office Hours, where we all log in and work together, + the whole Open Letter team is at members’ disposal.

• New: Free monthly startup strategy calls for all pro members.

• Support: All day, every day: unlimited introductions, recruitment, service provider referrals and business-building insights.

Want to join a group of South Africans building high-value tech-enabled startups? How about free entrance to all our events for the rest of this year?

Well, now you can — we’ve enabled free trials, so you can try it and cancel anytime…

What You Said…

We asked what delivery driver habits annoy you, and

🟩🟩🟩🟩🟩🟩 📱 Press “I’ve arrived” 5 mins before arriving (41%)

🟨🟨⬜️⬜️⬜️⬜️ 🧭 Ask for your address before accepting delivery (15%)

🟨⬜️⬜️⬜️⬜️⬜️ ᯤ Goes offline at the most crucial times (8%)

🟨🟨🟨🟨🟨⬜️ 👋 Drives past your house 3 times while you’re standing in street (36%)

Your 2 cents…

He he, yeah Marius, us and the kids make it a game — see how many times they gonna zoom by until they finally realise…