The release by the government of the new Buy Now Pay Later (BNPL) regulations proposed, the retreat from offering BNPL products is expected to be swift. BNPL businesses lose access to some of their revenue drivers:
- Late fees capped at $10 per month (Afterpay currently $68).
- Annual fees capped at $200 in year 1 ($125 thereafter).
- Australian Credit Licence required.
- Real credit and affordability checks.
We have already seen moves of retreat. Humm, for example.
Click here for the explanatory document from Treasury explaining the changes. Click here to see the draft legislation.
What does this mean for us? BNPL helped people purchase who didn’t want to use traditional credit or LayBy. To retain these shoppers retailers will need alternatives. While the banks have adjusted and are planning more in this space, we could consider refreshing our approach to LayBy. Doing nothing is not an ideal approach.