Afterpay allows you to shop now and pay later in 4 interest-free
instalments over a 6-week period. Late fees will be charged for
missed repayments.
Afterpay is a buy now pay later service available in many stores
across Australia, both online and in-store. By verifying your
identity and setting up an account, you'll have a line of credit
up to $1,500 and a shopping account. You may use this account as
a checkout option for purchases, which will allow you to pay
back the full amount in 4 interest-free instalments over a
6-week period, with the first instalment debited at checkout.
Charges will apply if you fail to make repayments on time.
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How does Afterpay work?
You can start shopping with Afterpay by signing up and linking an Australian
Visa or Mastercard debit or credit card. All you have to do is sign up and
confirm your details.
Online. Buy online by selecting Afterpay at the checkout.
In-store. Buy in-store at selected retailers by using your phone to
visit afterpayit.com.au and entering the amount you want. You’ll get a
barcode on your phone that can be scanned at the cash register.
You pay the first quarter of the purchase price at checkout, with the
remaining quarters to be paid back every 2 weeks after that date. Payments
are processed automatically, and you'll receive reminders before payments
are due.
In order to make sure the service is free to use for everyone, the amount
you can spend at any one time may be subject to approval. All this
information will be communicated to you before you've paid, so you can
always make an informed decision.
No interest. Working in a way similar to a no-interest loan, the
only charges a customer will pay are their instalments every 2 weeks,
and any applicable late fees.
No advance sign-up for in-store purchases. Even if you don't have an
account, you can still walk into a selected retailer and choose Afterpay.
You'll just need to sign up later.
Manage your account. Sign in to see your upcoming payments, orders
and account information.
Reminders. You'll be notified ahead of time when a payment is coming
up and how much it is, so that you can make sure there's no overdrawing.
Automatic deductions. Each quarter amount is automatically deducted
from your chosen card to make sure you can keep up with your repayments,
even if you’re busy or you can’t get online.
Refunds and more. You can still get a refund for purchases you’ve
made with Afterpay, in line with each store’s refunds policy.
Pay in advance. You can pay instalments ahead of time, penalty-free.
Market-leading security. Afterpay is a PCI DSS Level 1 certified
compliant Service Provider organisation. This is the highest level of
payment security there is, for both your card details and your personal
information.
Earn rewards. Shopping through Afterpay and paying each of your
instalments on time can earn you benefits through Afterpay's Pulse
Rewards program. These rewards range from discounts at stores to being
able to postpone your upfront quarter payment from checkout to 2 weeks
after your purchase.
How much does Afterpay cost?
There are 2 costs involved with Afterpay. Firstly, there is the cost of the
item you're buying. The other cost is a late fee for missed instalments.
If a deduction is unsuccessful, you will be notified and you will have a
chance to log in and choose a different payment method.
Failure to do so
will incur a $10 late fee, followed by another $7 for every 7 days your
payment is late.
Late payment fees are capped at 25% of the cost of the order, or $68 –
whichever is less. For example, a $40 order will not incur late fees above
$10, and a $400 order will not incur late fees above $68. If you believe you
are unable to pay an instalment, you should contact Afterpay to discuss your
options.
If you consistently fail to make repayments, Afterpay holds the right to
report it to a credit reporting bureau.
Is Afterpay safe?
Afterpay is touted as a new way to pay and different from traditional
credit products, but it is important to still be careful with Afterpay.
While Afterpay does not check your credit history before you apply, it
still reserves
the right to report defaults to credit reporting bureaus such as
Experian or Equifax. You need to keep this in mind before you apply.
In terms of your information, Afterpay is a PCI DSS Level 1 certified
compliant Service Provider organisation. This means that it abides by a
comprehensive set of requirements to keep your data secure.
What should I be aware of with Afterpay?
Afterpay and other buy
now pay later services can hold a place within your financial toolkit.
But like all financial products, there are things that you should watch out
for.
Don't spend more than you can afford. While breaking your payments
up into parts can make products seem more affordable, you are still
paying the same amount for that product. Ensure that you can comfortably
make each of your instalments so that you avoid any late fees.
The fees can add up. While Afterpay caps its late fees at $68, that
amount is per order. If, for example, you fail to make payments on 4
orders, you will be facing late fees of up to $272. If you believe you
won't be able to make a payment on time, be sure to contact Afterpay
directly to try and work out a solution with them.
It could affect your credit score. Afterpay claims it avoids sending
defaulted or late payments to credit bureaus, and that it will work with
its customers to solve any financial difficulties. However, it does
reserve the right to report defaulted payments to a credit bureau or to
a third party collections agency.
Is there a limit to how much you can spend with Afterpay?
Afterpay limits your spending based on your history with the service. New
accounts will be limited to $500, and this amount increases based on a
number of factors based around how long you've used Afterpay and whether
you've made your payments on time. Your spending limit may be reduced if you
fail to make your payments on time, and the more consistently you miss your
payments, the more your limit will be restricted. In short, your limit will
increase the more you make your payments on time and will be reduced the
more you fail to do so.
Does Afterpay do a credit check?
No. You'll be automatically approved as long as you're 18 or over
and have a
working credit or debit card.
How to sign up for Afterpay
In order to sign up, you have to meet the following criteria:
Be at least 18 years old and capable of entering into a legally binding
contract
Have a valid and verifiable email address and mobile number
Have an Australian credit or debit card
Afterpay is not a store credit application. You don't have to sign anything
or fill out an application form. All you have to do is make sure you've read
the details and signed up online.
Should you offer Afterpay (for store owners)?
As a business owner, offering Afterpay or any other interest-free payment
service has some pros and cons.
Pros
Increase buyer conversions. Flexible repayment options
make the transition from browser to buyer smoother.
Higher purchase rate. Empower your customers to make
additional purchases.
Increased customer base. Appeal to a larger customer
base, such as those who otherwise may not have been able to
afford your products. You also have access to Afterpay's 3.1
million strong customer base.1
Decreased cart abandonment. Offering Afterpay sees an
average 22% decrease in cart abandonment.
Cons
Fees. The cost of fees will depend on the transaction value
and on your merchant agreement with Afterpay.
Waiting for payment. Processing times for payment from
customer transactions may vary, depending on Afterpay and your
bank.
Watch: Afterpay vs credit cards: Which is better?
Have more questions about Afterpay?
Afterpay doesn't charge customers to use its service, but rather
makes money by charging retailers fees for offering the service. It
also makes some money
(approximately 20%, according
to an ASIC inquiry into the sector)
by charging customers late fees.