The release of the Treasury's Options Paper 'Regulating
Buy Now, Pay Later in Australia' (Options
Paper) is a key step in the Federal Government's moves
to tighten the rules around Buy Now Pay Later
(BNPL) credit products. Against the backdrop of
growing industry pressure and international developments, the
Options Paper seeks feedback and comments on how the sector should
be regulated, and provides three framework models of regulation
that could be used as the basis for future legislation.
BNPL allows consumers to defer payment for goods or services
– typically into four equal payments – without being
charged interest during the course of the deferral. A third party
(the BNPL provider) finances the purchase, and
will typically earn revenue through charging merchants service fees
and charging customers late payment fees. Some BNPL providers may
also charge customers an account subscription or maintenance fee
but this varies given the competitive landscape
