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1 in 5 Australians missing BNPL payments
The corporate regulator said on Monday, 16 November, that one in five consumers engaged in “buy now, pay later” services is missing payments, with some taking out loans for repayments.
1 in 5 Australians missing BNPL payments
The corporate regulator said on Monday, 16 November, that one in five consumers engaged in “buy now, pay later” services is missing payments, with some taking out loans for repayments.
In its report, the Australian Securities and Investments Commission (ASIC) found that 1.1 million transactions on BNPL services in 2018-2019 incurred multiple missed payment fees.
While the total credit extended to consumers doubled in 12 months, ASIC found that transactions increased from 16.8 million to 32 million in the same period.
“During 2018-19, missed payment fee revenue for all BNPL providers in the review was over $43 million, up 38 per cent from the previous financial year, while the number of BNPL transactions nearly doubled to 32 million in 2018-19 from 16.8 million in 2017-18,” ASIC said.
But the regulator has not called for any additional regulation, such as an extension of the credit act to the sector, which sector leaders and consumer advocacy groups have been seeking.
However, the Treasury is set to review the regulation of the payments system, including consumer protections.
“Policy and regulation of the buy now, pay later industry remains a matter for the government and, ultimately, the Parliament,” ASIC said.
“Buy now, pay later arrangements are clearly popular as a payment method. While working for the majority of users, some consumers are suffering harm.”
The regulator said changes were on the horizon that would impact the industry, with design and distribution obligations coming into effect in October next year.
Afterpay and its challenger brand Zip Co Ltd have both welcomed the report in separate statement, with Afterpay telling shareholders it would participate in the Australian government’s upcoming review of the regulatory architecture of the payments system.
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