Buy Now Pay Later Services in Australia: provider comparisons, how to sign up and tips to manage a BNPL account

Buy Now Pay Later (BNPL) has become a popular payment method for Australians in recent years. In fact, recent Mozo research suggests that 5.8 million Aussies already have at least one BNPL account.

Mozo Director, Kirsty Lamont says the allure of a zero interest payment service is why Buy Now, Pay Later has surged.

“Research has shown that younger Aussies are steering away from credit cards out of a fear of landing in massive debt,” said Lamont. “Buy Now, Pay Later promises a low cost alternative to the traditional plastic, wrapped up in a nifty app.”

There are over 10 providers in Australia currently offering BNPL services. If used responsibly BNPL can be a helpful budgeting tool, but like any new money-related innovation, it’s important to understand all of the ins and outs before you sign up. 

What is Buy Now, Pay Later and how does it work? 

Buy Now Pay Later services allow users to purchase a product or service at a shop or online, and pay it back in interest free instalments.

Interestingly, this concept isn’t new. You might recall traditional ‘lay-by’ services, in which you pay for goods in two or three instalments, and do not receive the goods until the full price has been paid. 

The difference between Buy-now-pay-later and lay-by is that customers who use BNPL services receive their items instantly and they make instalment repayments to the BNPL service provider, not the store that the goods are purchased from.

Buy Now, Pay Later providers in Australia

  • Flexible account options to match your spending needs
  • Weekly, fortnightly or monthly payment options
  • $6 monthly account fee (waived if you pay your balance in full each month)

BNPL giant Zip* has more than 2 million customers across Australia and New Zealand and is available to use across thousands of retailers both in-store and online. Zip has two account options: Zip Pay for purchases under $1000 and Zip Money for spending over $1000. Choose the payment frequency that works best for you as weekly fortnightly and monthly repayment options are available.

  • Maximum account limit of $2,000
  • No interest. Four equal fortnightly payments.
  • $10 late fee

Afterpay is one of, if not the biggest Buy Now, Pay Later services in Australia, allowing users to make purchases at thousands of stores online and offline nationally. In fact, according to the AFR, in 2020 the platform was gaining an average of 20,500 new customers a day! 

Afterpay customers can split up a single purchase into four interest-free fortnightly instalments. Easy-to-use app allows customers to manage their orders, get repayment notifications and stay up-to-date on retailers available via the platform.

  • 'Ghost card' maximum of $1000
  • Available to use at any store
  • Rewards club and price drop tracking

Klarna originated in Sweden 15 years ago and was introduced to Aussie shoppers through the help of CommBank. A standout feature of Klarna is that customers can pay through the app at any store, via its ‘ghost card’ feature, which has a maximum limit of $1000. Purchases split into 4 payments, paid every two weeks. The app also gives you access to exclusive deals and earn rewards plus price tracking means there could be times you don’t have to pay full price.

  • Make purchases up to $20,000
  • Terms of up to 36 months interest free
  • Fortnightly or monthly instalment options

Payright is a BNPL loan option which allows you to turn one big payment of up to $20,000 into smaller interest free installments. Because of this, Payright will conduct a credit check to ensure your repayment capacity. You can choose between fortnightly or monthly installments with a payback term of up to 3 years. There are some fees to consider so depending on the size of the purchase you might have to pay account establishment fee (maximum $89). There is also a $3.50 monthly account and a $2.95 payment processing fee which is added to each payment.

  • 0% interest payment plan for solar or home improvement projects
  • Up to $30,000 for homeowners
  • Fortnightly repayments from 6 - 60 months

A 0% interest payment plan available to Australian homeowners for home improvement projects like solar or battery installation, or kitchen and bathroom renos. No early repayment or payout fees. Included in your fortnightly repayments is a $1.50 per week account keeping fee.

More Buy Now Pay Later options

  • Openpay: Equal weekly or fortnightly payments. Sign up via the App, in-store or at the online checkout. Plans range from 1 month to 24 months.  You can shop with partners and track payments via the app. You won't be charged interest but some plans will include a plan management fee and an establishment fee may also apply.
  • Humm: two Humm account options - Small Things account has an account limit of $2000 spread over 5 or 10 installments, while a Big Things account can go up to $30,000 over 6 to 60 months. Some fees to consider such as an $8 monthly fee when purchases are spread out over 10 or more payments and a
    $6 late payment fee. The Big Things account also has an account  establishment fee which ranges from $35-$60 depending on the purchase.
  • Bundll: referred to as “the debit card on steroids” Bundll users can use the service at any store that accepts Mastercard to Buy now, Pay Later. You get 2 weeks to repay, interest-free with every tap of your bundll digital Mastercard. You can also Snooze your repayments for an extra 2 weeks or roll them up into a superbundll, which allows you to pay in 6 fortnightly instalments. If you miss a payment there is a $10 late payment fee (after a 24 hour grace period) and your account will be suspended.
  • Latitude Pay: 10 weekly payments and pay no interest. Maximum account limit of $1000 and flexibility to choose a payment date that suits you. Miss a payment and you’ll need to pay a $10
    late payment fee.
  • LayBuy: Not to be confused with the old school lay-by, with BNPL LayBuy you can own what you want now and split up the payments across six weeks, interest-free. There’s a $10 late fee if a scheduled payment is declined. Shop online or instore.
  • Pay It Later: Shop like normal at your usual store and at the checkout select pay it later then set up an account and make your first payment. Pay purchases off in four instalments and similar to other BNPL platforms if you miss a payment a $10 late fee applies.

What are the pros and cons of Buy Now, Pay Later?

BNPL sounds like a handy payment method to have in your back pocket, but you might be wondering if there’s more to this service than meets the eye. 


Possibly the biggest pro of Buy Now, Pay Later is that unlike a credit card, you won’t incur any interest for your purchases. It’s also pretty easy to sign up and be approved for, as most platforms don’t require a credit check when you sign up, making it widely accessible for Australians over the age of 18. 


It’s easy to manage as well, with many BNPLs featuring a smartphone app where users can manage their repayments, view upcoming repayments and purchase items. Some BNPLs, including Klarna, also reward users with discounts and coupons to various retailers


But like any kind of credit or have now, pay later option, there is the potential to get yourself into debt or financial difficulty. It’s also worth mentioning that if you miss an instalment payment, most providers will charge you a late payment fee. The amount will depend on the BNPL provider but is usually $10 on top of your installment. 


When you sign up for a BNPL account, you will need to link a bank or credit card account for payments. This means that it is important that you keep on top of the instalment due dates and always have money in your account to make your payments. If not, you could be hit with a late payment fee by the BNPL provider as well as a potential overdrawn account fee from your bank. If you link your credit card to your BNPL account you could end up paying interest if you don’t pay off your full balance in the statement period.


Additionally, some BNPLs have the right to report any negative actions on your account, such as missed payments to credit agencies, which can leave a mark on your credit history.

Where can I use Buy Now, Pay Later?

Buy Now, Pay Later is widely available in Australia and can be used either in store or online, however it’s worth noting that not all retailers accept BNPL as a form of payment. And for the retailers that do, they might not allow all BNPL platforms to be used. For instance, at online store The Iconic, only Afterpay is permitted. 

Most stores will have the BNPL options listed at either the online checkout or at the register.

What kinds of fees and charges could I have to pay with Buy Now, Pay Later?

This will depend on the type of BNPL service you sign up for. While you won’t be charged interest some of the most common fees include:

  • Monthly fees: Many BNPL services who cater to larger size purchases may charge a monthly account fee, which can range from $8 - $10 a month. 
  • Late payment fees: This is a fee you will be charged if you miss a payment. It’s important to keep in mind that some BNPL services can charge more than one late payment fee if you continue to default on a payment. 
  • Establishment fees: In some cases, you could be charged a one-off establishment fee to set up your account. 
  • Service fees: For bigger types of spending, you may be subjected to pay a service fee, which is the cost to set up your purchase.

What information do I need to provide to set up a BNPL account?

Every Buy Now, Pay Later platform will have their own requirements when a customer wants to set up an account, but we’ve jotted down the most common information you might be asked to provide:

  • Prove you are over the age of 18 through a valid form of ID
  • The details of your debit or credit card you want to link your account with 
  • Your email address or phone number 
  • Your billing information and address

Can I trust Buy Now, Pay Later?

In January 2020, BNPL platforms were called upon to sign a ‘Code of Conduct’ issued by the Australian Finance Industry Association (AFIA), which would come into effect March 2021.

Inside the code are the minimum standards BNPL firms must practice as well as other guidelines around late payment fees, age restrictions and how to manage customers experiencing financial hardship. 

However, ASIC says that as BNPL services continue to grow, more legislation will need to be introduced. From October 2021, BNPL companies must comply with the regulator’s ‘design and distribution obligations’, which involves regularly assessing whether their products are a good fit for a customer. 

ASIC says any further regulation should then be signed off by the government or even Parliament.

Tips for using BNPL responsibly

Although the idea of never having to pay interest might sound like a shopper’s dream, Buy Now, Pay Later users still need to use the service responsibly. To help keep spending under control while using BNPL, we’ve jotted four, quick tips.

  • Only use one platform: While Aussies may be spoilt for choice when it comes to BNPL, it’s best to only use one platform. Juggling multiple payments for different platforms can be tricky to keep up with and may see you spend beyond your means. 
  • Opt for a service with minimal fees: Many shoppers choose to use BNPL to save on costs, like interest. In this case, try to opt for a platform that charges minimal or zero fees for having an account. 
  • Set reminders for upcoming payments: Although some BNPL platforms do send payment reminders to customers, it’s still worth setting up your own reminders to ensure you are not charged a late payment fee. You can do this on your phone or marking it in your calendar. 
  • Be realistic about your repayment capacity: If you are planning on having multiple BNPL purchases on your account, just be sure you have enough wiggle room in your budget to do so.

What happens if I get into financial trouble?

Financial hardship can happen to anyone and it’s important to know what to do if you get into financial trouble managing your BNPL account. 

Most BNPL platforms will have a financial hardship program, so your first step should be to get in touch with them as soon as you realise that you will not be able to make a payment. They might be able to help you to sort out a temporary solution based on your circumstance. Some options could include pausing or rescheduling repayments for an agreed time or waiving fees. 

However, if your financial problems go beyond just managing your BNPL account and you’d like more assistance around managing money, a financial counsellor can give you free, confidential advice about how you can get things back on track. More information on free financial counselling can be found at MoneySmart.

*ZIP TERMS - Zip Pay: Minimum monthly repayments are required. A monthly account fee of $6.00 applies. Pay your closing balance in full each month and we'll waive the fee. Zip Money: Minimum monthly repayments are required. Paying only the minimum monthly repayment amount will not pay out the purchase within the interest free period. Any balance outstanding at the expiry of the interest free period for the purchase will be charged interest at the contractual rate, currently 19.9%. A $6 monthly account fee applies. A one-off establishment fee may apply. Available to approved applicants only. Terms & Conditions apply and are available on application. See your contract for further details. Credit provided by zipMoney Payments Pty Limited (ABN 58 164 440 993, Australian Credit Licence Number 441878).

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