Retailers back buy now, pay later services

| December 5, 2018

The National Retail Association (NRA) has backed buy now, pay later service providers such as Afterpay, OpenPay and ZipPay.

This follows moves by regulator ASIC to impose additional oversight powers and Federal Labor flagging its support for further regulation.

NRA Deputy CEO Lindsay Carroll said it is important for regulators and legislators to be mindful of the third party in this debate – the businesses that accept these payment facilities.

“The concept of buy now, pay later isn’t new to retailers – it’s nothing other than layby in reverse,” said Ms Carroll.

“We are seeing an ever-increasing number of retailers accepting payment through buy now, pay later platforms as a means of offering their goods and services to a wider range of consumers – and it is delivering results.

Buy now, pay later services have been in the spotlight in recent months, with ASIC raising concerns about the fact that these services are not subject to the responsible lending requirements of other providers of credit and credit-like services.

“Because they don’t charge interest, and only charge fixed fees, most buy now, pay later services fall into an exception deliberately included in the legislation. Previously, a service falling into this category was considered too low a risk to be worth regulating.”

In November 2018 ASIC published its report which stopped short of recommending that the National Credit Code apply to these services.

“The buy now, pay later sector is able to exist solely because it is not subject to the clunky credit laws and has a strong incentive to act with integrity to prevent the government from regulating them,” Ms Carroll said.

“Throughout the ASIC report, we see these businesses working alongside the regulator to address any concerns raised, undertaking reviews of their contracts, processes and practices where a potential for consumer harm is perceived.

“We eagerly anticipate the buy now, pay later and retail sectors continuing to grow side by side, diversifying the products, markets, payment options and consumer demographics accessible to all three parties in these relationships.”

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