HomeChoice's Fintech Arm Invests Heavily in AI and Expands Services Amidst Rapid Growth

The digital financial landscape in South Africa is witnessing significant growth, as demonstrated by HomeChoice's fintech arm, FinChoice, and its investment in various technology-driven initiatives. In a bold move to harness the power of artificial intelligence (AI), the company is channeling more than R25 million annually into AI systems to enhance its offerings in personal lending, insurance, and value-added services.

PayJustNow, the cutting-edge buy-now-pay-later (BNPL) provider under HomeChoice, has reported a staggering 1.8 million customers generating a Gross Merchandise Value (GMV) of R1.5 billion and fees of R73 million in a six-month period ending in June 2024. Their BNPL model is becoming increasingly popular among South African consumers, particularly millennials and Gen Zs, who comprise 63% of their customer base.

This surge has been in part fueled by a strong marketing drive in March 2024, as suggested by Easy Equities. The statistics project nearly 45 million millennials to be adopting mobile payment methods this year, signaling a paradigm shift in consumer payment preferences.

Driving innovation in marketing, HomeChoice provides anonymized shopper data analytics to merchants, assisting them in tailoring customer experiences and understand shopping behaviors—a model similar to Checkers, who launched an endeavor leveraging data from its Xtra savings loyalty program. PayJustNow is aiming for this marketing service to contribute 10-11% of its total revenue in the upcoming year.

Furthermore, PayJustNow is committing sizable investments, between R20 million to R25 million, in AI, chiefly for financial forecasting and fraud detection—pursuing one of the industry's cutting-edge internally developed AI models for this purpose.

Despite international skepticism surrounding BNPL's financial liability and sustainability, PayJustNow's Chief Executive Craig Newborn remains confident. He points out the critical difference in their approach: South African BNPL providers utilize credit bureau data, taking consent from sign-ups and basing BNPL approval on affordability. The company reports that only approximately 2% of their clientele poses a repayment risk.

Additionally, PayJustNow is trialing PayStretch, a new retail instalment credit product, set to be officially launched to the market later this year. This option gives customers flexibility, allowing them to opt for an extended repayment period of up to 12 months.

Weaver Fintech, the umbrella entity for HomeChoice’s fintech ventures, is well-positioned for continuous growth with a robust R1.1 billion in cash and undrawn funding facilities. Executive chair Shirley Maltz is confident of sustained high earnings growth by expanding their product range and cross-selling within the burgeoning ecosystem.