ASIC publishes report on its review of the ‘buy now, pay later’ industry
By Jim Bulling, Felix Charlesworth and Edwin Tan
On 28 November 2018, ASIC published Report 600: Review of buy now pay later arrangements (Report). The Report is the product of ASIC’s 10 month investigation into the industry. It examines the conduct, structure and arrangements of 6 buy now pay later providers including Afterpay and zipPay (Providers). The Report also notes that the responsible lending obligations of the National Consumer Credit Protection Act which require credit providers to, among other things, assess a consumer’s financial position, do not apply to buy now pay later arrangements.
The Report looks at the exponential growth of the industry from over 50,000 transactions in April 2016 to 1.9 million transactions in June 2018. While the average value of transactions under these arrangements has decreased, the outstanding debt in this time has roughly doubled to over $903 million.