New rules on the way for buy now pay later schemes


The Government wants to introduce better checks to buy now, pay later schemes to protect vulnerable kiwis.

Buy now, pay later schemes are a rapidly growing form of unsecured short-term credit used by consumers to pay for goods and services.

It does not charge interest, although late fees are charged if a payment is missed.

“This is the right thing to do,” Trade and Consumer Affairs Minister David Clark said.

“As the global cost-of-living crisis puts pressure on New Zealanders and their families, we’re taking steps to help them avoid unmanageable debt, especially as the holiday season approaches.”

He said the sector has proven popular and has grown rapidly: the amount of money spent on these schemes in 2021 was $1.7 billion, compared to $755 million in 2020.

An Afterpay spokesperson says it has “always advocated for regulation that delivers strong consumer outcomes, is fit for purpose and proportionate.”

“Striking the right regulatory balance will mean that consumers will not go back to credit cards and payday loans, products that profit from people getting into debt.”

The government wants affordability checks for purchases over $600, the same protection in place for borrowers who want to use credit cards and personal loans.

Smaller loans would not have to go through the same process, but will require full credit reports, Clark said.

Lenders would also be required to have a hardship process and to belong to a dispute resolution scheme.

Consultation on the proposed changes is expected to open later this year, with final regulations made in 2023.


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