Buy now, pay later (BNPL) is widely considered a popular payment option in Australia. Experts predict that BNPL payments will grow by 18.2% to reach over $22 billion AUD in 2023.1
BNPL can offer convenience and flexibility, but how does it work and what are the potential benefits and risks to consider? Learn more in this guide.
BNPL is a form of credit that allows shoppers to make purchases immediately and pay for them over time, typically in instalments. It’s often used for large or unexpected expenses.
When considering instalment plans, it’s important to understand what fees and charges are linked to different BNPL offers, for example account fees, late fees, interest charges, etc. You should also note that interest may be payable on interest-free BNPL products if you make repayments using a credit card.
In addition, note that BNPL providers often perform credit checks. A person’s credit score may influence their eligibility for credit and the terms and conditions of credit services.
So, what should someone know about buy now, pay later? While the process will vary depending on the provider, it generally involves:
Not everyone may qualify for a BNPL plan, and it will depend on, among other things, the credit underwriting and risk policies of the BNPL or credit provider. Some credit-related information which BNPL providers may consider is:
Individuals may benefit from:
It’s essential to be aware of potential risks before using BNPL. Here are some common examples:
PayPal buy now, pay later is available for eligible PayPal customers on qualifying purchases at checkout and may include Buyer Protection on eligible purchases. It allows shoppers to divide eligible purchases between $30 and $2000 into 4 interest-free instalments payable over 6 weeks. Learn more about what is buy now, pay later.
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