‘Buy now, pay later’; time to believe in the hype?
‘Buy now, pay later’; time to believe in the hype?
Is ‘Buy Now, Pay Later’ the preferred payment method of the future? Afterpay, Oxipay, Partpay and Laybuy. You may have
started to hear these terms being thrown around recently. If you haven’t yet,
then you certainly will do soon. What is it? What are they? Will these have any
effect on me? Afterpay, Oxipay, Partpay and Laybuy are each a type of company that
provides consumers with a ‘buy now pay later’ offering. No interest, no fees
(to a point) all with the intention to encourage you the consumer another mode
of payment method. A popular scheme already across the ditch, the trend is
becoming more commonplace across the New Zealand marketplace, in-store and even
more so online. Perhaps not as popular as the lime scooter craze but
nonetheless just as exciting, the concept allows consumers the ability to buy
products and pay for them later, in regular instalments. And while interest
rates are not charged, the companies often charge penalty fees and
infringements for the likes of late payments.
The service is appearing to grow
rapidly among a younger demographic (18-34) with this group making up over
two-thirds of the ‘buy now, pay later’ customer base. This demographic is
seemingly drifting further away from the credit card mode of payment, instead
utilising debit cards and alternative means, namely buy now pay later schemes
to fulfil purchase decisions. From a retailer’s perspective, the concept brings
a new group of people who may otherwise not be willing or able to make a
purchase.
Before delving into the potential
pros and cons of the concept and the services involved we will provide a brief
summary of each provider below and a link to each company’s homepage so you can
undertake further research and understanding of your own;
Afterpay – is a digital service that makes it possible to buy something now and pay it off over four equal instalments, due every two weeks. Featured merchants include Trademe, Michael Hill, Hallensteins, Kmart, Country Road, Dotti.
For more go to https://www.afterpay.com/en-NZ/how-it-worksOxipay – “is a flexible payment solution backed by FlexiGroup NZ limited providing customers with a smarter way to buy what you want now by splitting the overall payment over four easily managed payments (fortnightly).” https://oxipay.co.nz/ Oxipay featured merchants in NZ include Farmers, Briscoes, Rebel Sport, Whitcoulls among others.
For more go to https://oxipay.co.nz/faq/Partpay – you pay 25% for the product up front, then 25% instalments over the next three fortnights.
Featured merchants include The Warehouse (online),
Torpedo 7 (online), Beds ‘r’ us (online)
For more go to https://partpay.co.nz/how-it-works/Laybuy– allows payment over six weekly automatic payments. With Laybuy as opposed to the alternative options, you can choose your payment day and view a schedule for set payments. Featured merchants include Amazon, Briscoes, Glassons, Rebel Sport, Smiths City among others.
For more go to https://www.laybuy.com/nz/how-it-works
Further interesting points regarding
these ‘buy now, pay later’ services.
There are concerns that such schemes appear to normalise
debt. The safest way to shop remains to save upfront so that you only buy what
you need and don’t end up spending beyond your means.
You can build a positive credit history by utilising these
services. According to Laybuy; if you are a good payer and never miss a payment,
Laybuy will report this information as part of its commitment to comprehensive credit
reporting. For
more on comprehensive credit reporting check out this guide.
