New laws could mean bad news for Afterpay, Zip users
Buy now, pay later (BNPL) reforms have been a curiously long time coming. First discussed more than 10 years ago, they came into effect last week. And the legislation is, well, interesting.
In fact, consumers will still be able to play fast and loose with their future pays. But let's take a step back and look at the changes.
Firstly, BNPL providers – the likes of Afterpay, Zip, Humm, Klarna and more – will finally be regulated by the consumer credit code.
Previously they fell through the cracks because they don't charge interest – the business model is instead usually to levy penalties for late payments of the typically four after-the-fact repayments of your purchases, and to charge merchants for the ability to allow customers to delay payment.
Now, when you apply for a BNPL account, you will have to answer questions about your finances. See the huge loophole in that? It's only new customers. People with existing accounts will not need to requalify.
What's more, though providers must from now on ask about income and debts, there's no obligation to verify the information. And where payments are for less than $2000 – which is most of them – not much changes at all.
The proliferation of dangerous advance-pay services should be next on the government's crackdown agenda.
Even at larger amounts, providers only have to adhere to the vaguely defined 'responsible lending'. A Treasury announcement said the application of this would be 'flexible, adaptable and proportionate to the risk of consumer harm'.
Which means that responsible spending – and remember, BNPL allows spending with money you haven't yet earned – will come down to individual responsibility. Critics (I'm one of them) believe the services are often a pathway to further financial issues, particularly in a cost-of-living crisis.
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Sydney Morning Herald
13-06-2025
- Sydney Morning Herald
New laws could mean bad news for Afterpay, Zip users
Buy now, pay later (BNPL) reforms have been a curiously long time coming. First discussed more than 10 years ago, they came into effect last week. And the legislation is, well, interesting. In fact, consumers will still be able to play fast and loose with their future pays. But let's take a step back and look at the changes. Firstly, BNPL providers – the likes of Afterpay, Zip, Humm, Klarna and more – will finally be regulated by the consumer credit code. Previously they fell through the cracks because they don't charge interest – the business model is instead usually to levy penalties for late payments of the typically four after-the-fact repayments of your purchases, and to charge merchants for the ability to allow customers to delay payment. Now, when you apply for a BNPL account, you will have to answer questions about your finances. See the huge loophole in that? It's only new customers. People with existing accounts will not need to requalify. What's more, though providers must from now on ask about income and debts, there's no obligation to verify the information. And where payments are for less than $2000 – which is most of them – not much changes at all. The proliferation of dangerous advance-pay services should be next on the government's crackdown agenda. Even at larger amounts, providers only have to adhere to the vaguely defined 'responsible lending'. A Treasury announcement said the application of this would be 'flexible, adaptable and proportionate to the risk of consumer harm'. Which means that responsible spending – and remember, BNPL allows spending with money you haven't yet earned – will come down to individual responsibility. Critics (I'm one of them) believe the services are often a pathway to further financial issues, particularly in a cost-of-living crisis.
The Age
13-06-2025
- The Age
New laws could mean bad news for Afterpay, Zip users
Buy now, pay later (BNPL) reforms have been a curiously long time coming. First discussed more than 10 years ago, they came into effect last week. And the legislation is, well, interesting. In fact, consumers will still be able to play fast and loose with their future pays. But let's take a step back and look at the changes. Firstly, BNPL providers – the likes of Afterpay, Zip, Humm, Klarna and more – will finally be regulated by the consumer credit code. Previously they fell through the cracks because they don't charge interest – the business model is instead usually to levy penalties for late payments of the typically four after-the-fact repayments of your purchases, and to charge merchants for the ability to allow customers to delay payment. Now, when you apply for a BNPL account, you will have to answer questions about your finances. See the huge loophole in that? It's only new customers. People with existing accounts will not need to requalify. What's more, though providers must from now on ask about income and debts, there's no obligation to verify the information. And where payments are for less than $2000 – which is most of them – not much changes at all. The proliferation of dangerous advance-pay services should be next on the government's crackdown agenda. Even at larger amounts, providers only have to adhere to the vaguely defined 'responsible lending'. A Treasury announcement said the application of this would be 'flexible, adaptable and proportionate to the risk of consumer harm'. Which means that responsible spending – and remember, BNPL allows spending with money you haven't yet earned – will come down to individual responsibility. Critics (I'm one of them) believe the services are often a pathway to further financial issues, particularly in a cost-of-living crisis.
SBS Australia
12-06-2025
- SBS Australia
New regulations hit Buy Now, Pay Later providers
For millions of Australians, Buy Now, Pay Later providers like Afterpay or Zip have become a common tool to take the pain out of purchases by breaking the cost of goods or services into smaller chunks paid over several weeks. As of Tuesday the 10th June, strict new regulations from the Albanese government have come into play with Buy Now, Pay Later providers now treated similarly to a credit card. This last change means that your Buy Now, Pay Later debts could impact your credit score and could impact a customer's future borrowing capacity for a house or a car. SBS Filipino 12/06/2025 08:54 📢 Where to Catch SBS Filipino
