Overview

• From June 10, all buy-now-pay-later firms must hold an ASIC credit licence, run mandatory credit checks on new applicants and comply with existing credit laws.
• Afterpay and other major BNPL providers will set initial spending limits based on customers’ credit scores instead of offering a uniform starting allowance.
• In a recent survey, over 10% of Afterpay users reported being told by banks or mortgage brokers to close their BNPL accounts to secure home loans and were then offered credit cards.
• Consumer advocates have praised the enhanced transparency but warn that ‘light-touch’ checks on loans under $2,000 may leave some users exposed to financial strain.
• Reporting BNPL repayment histories to credit bureaus could help build credit profiles but also risks damaging scores if users miss or delay payments.