From Afterpay to Zip, Klarna and every Buy Now Pay Later (BNPL) company in between, it seems Aussie shoppers can't get enough of splitting up purchases. In fact, Mozo research has found that 5.8 million Australians have at least one Buy Now Pay Later account. But ever since BNPL hit Aussie shores, there's one question that still remains for almost all BNPL users: will it affect my credit score? One of the biggest reasons BNPL services have surged in popularity over the past few years is that it promises interest-free shopping with little to no fees.So why would the average Aussie be worried about this service affecting their credit score if no interest is involved? Well, like most personal financial products, it's all in the details. To give you the inside scoop as to whether signing up to a Buy Now Pay Later platform could impact your credit health, we've compiled this handy guide to help you.
CommBank has just become the latest company and the first major bank to enter the Buy Now Pay Later (BNPL) market. Similar to other BNPL products, customers can split up their purchases into four equal fortnightly instalments for transactions above $100. In order to access the service, customers will need to link it through their CommBank bank account. Other notable features of the CommBank BNPL product include:
Digital payment giant PayPal has today announced it will be venturing into the Buy Now Pay Later (BNPL) space. Similar to other BNPL companies, PayPal’s product will allow customers to have a limit of up to $1,500 for transactions, which can then be paid back in four equal instalments interest-free, with the first instalment being paid at the time of purchase. There is a $10 late payment fee, which is capped at $30 for purchases over $125, or $10 for purchases under $125. As the product does not charge interest, it will not be regulated under Australian credit laws. However, Toon says the company will be conducting extensive background checks on customers to ensure appropriate applicants are approved. PayPal is also looking into the new BNPL Code of Practice which was released last Monday. “PayPal has developed a reputation over many years as being a responsible payments platform, and that is absolutely the focus of what we’re looking to achieve through the entry into the buy now, pay later space,” said PayPal Australia’s general manager of payments, Andrew Toon. According to Toon, the decision to launch the BNPL product came in response to the high volume of requests the company received from its Australian business customers. “They’re looking for us to be able to deliver choice and flexibility to their customers in the PayPal checkout,” he said. The PayPal BNPL product was already launched in the US last year with huge success. “In six months in the US, they got 45 million BNPL customers with the same product,” said chief executive of payments consultancy McLean Roche, Grant Halverson. “They would be the biggest [BNPL] threat to come here.”If you’d like to find out how PayPal’s new BNPL product stacks up to other offers on the market, head on over to our comprehensive Buy Now Pay Later guide.
Fintech lender Plenti (formerly known as RateSetter) has launched a brand new interest free option for Aussies looking to invest in renewable energy technologies, such as solar panels and batteries. Customers who apply for the Buy Now Pay Later (BNPL) product will be able to pay off their investment within 3 to 6 years, or up to 72 monthly instalments. As mentioned, the product is interest free, however customers will be charged a fixed $6 monthly fee to cover the cost of accessing the loan. In case you weren’t aware, the BNPL model allows customers to purchase items upfront and pay them off in either fortnightly or monthly instalments without incurring any interest. According to Plenti, the initiative is already off to a positive start thanks to its pilot program that was rolled out three months ago. The lender found that solar applications through these selected partners jumped by 80%, compared to the average demand in the last six months. “The fact that so many green home Aussies want to invest even further in solar is a huge positive in times of economic uncertainty,” said head of renewable energy finance at Plenti, Louis Edwards. “To me this shows more people are realising the technology curve we are on, the benefit with new products like home batteries and the need to get in early to invest in their home energy future.”
Over a year ago, there was talk of a new Code of Practise major Buy Now Pay Later (BNPL) companies were expected to sign. Today, that code is now officially in business. Developed by the Australian Finance Industry Association (AFIA), the Code of Practise sets the best practise for BNPL, while ensuring customers are protected. According to the AFIA, the Code is a ‘world first’ for the BNPL sector and will aim to go above standard Australian law.“From the get go, strengthening consumer protections across the sector was a focus for AFIA and its BNPL members. The Code is explicitly consumer focused and has nine commitments that signatories make directly to the people that use their products and services,” said AFIA chief executive Diane Tate. Some of the obligations Buy Now Pay Later companies must abide by include forbidding customers under the age of 18 from using the service and prohibiting users in financial hardship from making additional purchases on the platform. Other rules include capping late payment fees and conducting customer checks before they approved for the service.
For many Aussie shoppers, using Buy Now Pay Later (BNPL) at the checkout has become as common as paying with a debit card. In fact, Mozo found that 5.8 million Aussies have at least one BNPL account. But if you are one of the few who are yet to take this innovative payment method for a spin, it’s important to understand how to use it correctly. To get you off on the right foot, we’ve jotted down some do’s and don’ts of using Buy Now Pay Later.
Considering using Buy Now Pay Later (BNPL) to make purchases online? Or maybe you already do ... You’re not alone. In fact, according to ASIC's 2020 Buy Now Pay Later: An Industry Update report from the 2017-18 financial year to the 2018-19 financial year, the number of active BNPL accounts across six providers grew by 38% (from 2.7 million to 3.7 million). There was also a large increase in BNPL transactions, too. From June 2018 to June 2019, the number of purchases increased from 1.9 million to 3.4 million (an increase of 75%). “It’s not surprising that Buy Now Pay Later platforms continue to see an uptick in the amount of customers signing up and making purchases,” Mozo director, Kirsty Lamont says. “However, unlike the security of a large bank or credit card provider, some consumers may have questions around how these newer platforms store and protect their information and whether its a safe payment method to use online.” So how secure is using BNPL online? Let’s take a look … ASIC found that over the 2018-19 financial year, Afterpay (73%), Zip (11%) and Humm (11%) had the highest total value of transactions. All three platforms can be used both online and in-store. So we’ve compared these three BNPL providers to find out what information they collect from consumers on sign up, how they use it and any risks that come from using them online.
One of the latest fintech innovations to hit Aussie shores is Buy Now Pay Later (BNPL), the interest-free platform which breaks up your everyday spending. At the time of writing, there are more than ten BNPL options available, with each delivering a different customer experience. So if you’ve been thinking about signing up for a Buy Now Pay Later service, finding the one that’s right for you can prove difficult. However it’s important to find the platform best suited to your spending needs, as it can help you save in unnecessary fees. To help you find your Buy Now Pay Later match, we’ve compiled a few scenarios you might align to and suggest an appropriate BNPL option.
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.