Consumers in Australia have enthusiastically adopted the slew of new ‘buy now, pay later’ services available at the point of sale. These include those marketed under brand names like Afterpay, Brighte, Certegy, Openpay, Payright and Zipmoney as well as their numerous competitors. Buy now, pay later services, as the name suggests, allow you to buy something and pay it off over time typically in set instalments. Many people value the convenience these services offer and the ability to spread larger purchases out over time. And in our age of instant gratification, being able to get the thing you want now without having to pay for it is, well… gratifying.
A word of caution though, buy now, pay later providers invariably charge fees to customers who miss or make late payments. These can add up. According to a recent report by the corporate regulator the Australian Securities and Investments Commission (ASIC), around a quarter of all customers, or 1.2 million people ended up missing one or more of these payments in 2018-19. Providing a windfall in fees of around $43m to the providers. So, by all means, enjoy the convenience of buy now, pay later during our festive season but please ensure you make the payments on time and avoid being hit with these unnecessary fees.