Monday 26 August 2019
It’s no secret Aussie shoppers have a love affair with buy now, pay later. Heralded as an interest-free alternative to credit cards, these delayed payment services have only gotten more popular with time.
And while it’s fair to say Afterpay has dominated the market to date, more and more competitors have emerged to challenge the fintech giant. One of the latest providers to hop aboard the bandwagon is humm.
So what is humm and how is it different from other buy now, pay later services out there? Let’s take a look.
Like many buy now, pay later services, humm allows customers to divide the cost of their purchases into smaller, more manageable instalments or ‘slices’, which you would then pay back interest-free on a weekly or fortnightly basis.
But humm Chief Revenue Officer of FlexiGroup (which humm is part of), Libby Minogue said humm stands out from other options in the market for a couple of reasons.
With humm, you could make repayments for purchases spanning anywhere from $1 up to $30,000! That’s a considerably larger range than what’s available with most buy now, pay later services.
To cover this range, humm offers two different types of wallets - one for ‘Little Things’ or everyday spending (up to $2,000), and another for ‘Big Things’ or big ticket items ($2,000- $30,000).
You can repay ‘Little Things’ in 5 or 10 slices, while any ‘Big Things’ can be repaid over 6, 12 or 24 months all the way up to 60 months.
Humm also gives customers the flexibility to choose which day you would prefer to make your repayments.
“With other buy now pay later providers, if you buy something today, in two weeks from that day, that’s another payment. But humm allows you to line up those repayments with pay days,” Minogue said.
You can apply for humm, as long as you tick the following boxes:
“Setting up an account is really easy,” Minogue said. All you need to provide is some personal details, including your name and address, as well as one of the following three ID documents for verification: your driver’s licence, your passport or your medicare number.
Ready to get started? Download the humm app either on iOS or Android, and you’ll have the opportunity to register there.
As soon as you’ve signed up and gotten approval, you’ll have access to a ‘Little Things’ wallet. Your initial spending limit or cap in that wallet depends on the background info you’ve shared with humm during the sign-up process, so it will vary from customer to customer.
What if your initial spending limit isn’t as high as you’d hoped? Not to worry! Minogue said once you’ve built up a good history of making your repayments on time, “you will get access to more credit”.
Or if you can’t afford to wait, you could also apply for a ‘boost’ in your spending limit by providing humm with further information, such as your bank statements.
With ‘Little Things’, you can buy as many items as you would like - as long as you stay within your spending limit. The more you buy, the less ‘available spend’ you’ll have. But your available spend will go back up again once you make your repayments, much like a credit limit on a traditional credit card.
Meanwhile, with ‘Big Things’, you’ll need to apply and get approved before you shop with humm. This involves sharing details of your income with humm, including bank statements. You could get up to $10,000 pre-approved or up to $30,000 approved if you apply in-store.
If approved, you’ll receive a barcode which indicates the maximum amount you can spend. Then it’s just a matter of showing a staff member your barcode when you make your purchase in-store. Keep in mind that buying ‘Big Things’ online isn’t available just yet.
With humm, customers can either shop in store or online. The products and services available range from ‘Little Things’ like retail and jewellery, to ‘Big Things’ like home improvements and health, which includes dental, IVF and audiology.
You can find a full list of products and services on the humm app or website.
While you won’t have to worry about being charged interest on your purchases, there are a few fees that come with using humm, although it’s minimal for purchases up to $2,000. If you pay off ‘Little Things’ in 10 slices, you’ll only be charged a monthly fee of $8, and you can avoid fees altogether if you choose to make repayments in 5 slices.
For ‘Big Things’, it gets a little steeper - you can expect a monthly fee of $8 and an establishment fee of $35 up to $90.
To ensure humm transactions remain safe and secure, humm conducts independent reviews around privacy and compliance.
“We’ve actually just completed one with no issues raised,” Minogue said. “We ensure across FlexiGroup that we have best practice in place and are meeting all the regulations around privacy and compliance.”
Ultimately, it comes down to the amount you’ve been approved for, as you can purchase as many ‘Little Things’ as you would like, given that you stay within your ‘available spend’ limit. But keep in mind you will be charged a repeat purchase fee of $22 for any additional ‘Big Things’ buys.
As you use humm more and more, the number of payment plans you’re able to have simultaneously could also go up.
“If you’ve made more than two payments on a plan and you have a good record, then [humm] will also allow you to increase your number of purchases,” Minogue said.
Yes, humm charges $6 for any late payments.
If you miss a payment within the first 10 days, humm will also contact you via phone, SMS or email, to check how everything is going and to remind you there’s a payment overdue (including a $6 late fee).
According to Minogue, “75% of our late payments are actually sorted within that [10-day] time frame.”
If you still haven’t made a payment 10 days after the deadline, humm has two teams who deal with late payments: one for the ‘Little Things’ wallet and another for the ‘Big Things’ wallet. These teams will get in touch with the customer and work with them to figure out a plan that suits their needs and circumstances.
If there's still no resolution after 30 days of having those discussions, that overdue payment could potentially be passed onto the debt purchaser, and you’ll pay a collection fee of $30.
But Minogue said humm tries to ensure late payment issues don’t advance to that final stage.
“That’s why we’re really transparent around support,” she said. “We don’t make significant profit from late payments … our late payment fee is among the lowest in the industry and we have a range of processes in place to ensure customers feel supported and create an individual plan if they have any problems with payment.”
You can set your mind at ease about this one. While your credit score may be checked when you sign up to humm, that won’t affect your credit score or leave a record on your credit file. And as long as you use the service responsibly, it will stay that way.
However, any delayed instalments which get sold off as bad debt could leave a black mark next to your name. So be sure to jot down the dates on your calendar and make your payments on time!