'Buy now, pay later' services have been overhauled. What it means for you
BNPL services, such as Zip, StepPay and Afterpay, allow consumers to buy goods or services with credit and then repay the loan over interest-free instalments.
Customers will be subject to a credit check and questions about outstanding debts to prevent them from taking on repayments they cannot afford.
READ MORE: 'Hardly slept all night': $70 million lotto winner plans to retire immediately
Additionally, providers will require a credit licence from ASIC, be a member of the external dispute resolution scheme AFCA, give reasonable consideration to hardship requests and introduce caps on the maximum permitted default fees.
ASIC commissioner Alan Kirkland said the reforms were an "important step".
"We strongly encourage buy now pay later providers who do not already have the appropriate credit licence to apply for one as soon as possible," Mr Kirkland said.
"Providers who do not have their credit licence application accepted for lodgement by ASIC by 10 June 2025 may be engaging in unlicensed conduct if they continue to operate."
National Consumer Law Centre senior policy officer Rose Bruce-Smith said the changes set "a floor of consumer protection".
"It is a lighter touch regime than the full credit act, which is enforced for home loans, credit cards, everything else that is regulated."
Ms Bruce-Smith noted it had been ten years of Buy Now Pay Later services as a "fully unregulated credit product where customer outcomes were left to the private market", so any regulation was welcome.
Buy Now Pay Later (BNPL) services will be strictly regulated in a major shakeup of the payment service from June 10.
BNPL services, such as Zip, StepPay and Afterpay, allow consumers to buy goods or services with credit and then repay the loan over interest-free instalments.
Customers will be subject to a credit check and questions about outstanding debts to prevent them from taking on repayments they cannot afford.
READ MORE: 'Hardly slept all night': $70 million lotto winner plans to retire immediately
Additionally, providers will require a credit licence from ASIC, be a member of the external dispute resolution scheme AFCA, give reasonable consideration to hardship requests and introduce caps on the maximum permitted default fees.
ASIC commissioner Alan Kirkland said the reforms were an "important step".
"We strongly encourage buy now pay later providers who do not already have the appropriate credit licence to apply for one as soon as possible," Mr Kirkland said.
"Providers who do not have their credit licence application accepted for lodgement by ASIC by 10 June 2025 may be engaging in unlicensed conduct if they continue to operate."
National Consumer Law Centre senior policy officer Rose Bruce-Smith said the changes set "a floor of consumer protection".
"It is a lighter touch regime than the full credit act, which is enforced for home loans, credit cards, everything else that is regulated."
Ms Bruce-Smith noted it had been ten years of Buy Now Pay Later services as a "fully unregulated credit product where customer outcomes were left to the private market", so any regulation was welcome.
Buy Now Pay Later (BNPL) services will be strictly regulated in a major shakeup of the payment service from June 10.
BNPL services, such as Zip, StepPay and Afterpay, allow consumers to buy goods or services with credit and then repay the loan over interest-free instalments.
Customers will be subject to a credit check and questions about outstanding debts to prevent them from taking on repayments they cannot afford.
READ MORE: 'Hardly slept all night': $70 million lotto winner plans to retire immediately
Additionally, providers will require a credit licence from ASIC, be a member of the external dispute resolution scheme AFCA, give reasonable consideration to hardship requests and introduce caps on the maximum permitted default fees.
ASIC commissioner Alan Kirkland said the reforms were an "important step".
"We strongly encourage buy now pay later providers who do not already have the appropriate credit licence to apply for one as soon as possible," Mr Kirkland said.
"Providers who do not have their credit licence application accepted for lodgement by ASIC by 10 June 2025 may be engaging in unlicensed conduct if they continue to operate."
National Consumer Law Centre senior policy officer Rose Bruce-Smith said the changes set "a floor of consumer protection".
"It is a lighter touch regime than the full credit act, which is enforced for home loans, credit cards, everything else that is regulated."
Ms Bruce-Smith noted it had been ten years of Buy Now Pay Later services as a "fully unregulated credit product where customer outcomes were left to the private market", so any regulation was welcome.
Buy Now Pay Later (BNPL) services will be strictly regulated in a major shakeup of the payment service from June 10.
BNPL services, such as Zip, StepPay and Afterpay, allow consumers to buy goods or services with credit and then repay the loan over interest-free instalments.
Customers will be subject to a credit check and questions about outstanding debts to prevent them from taking on repayments they cannot afford.
READ MORE: 'Hardly slept all night': $70 million lotto winner plans to retire immediately
Additionally, providers will require a credit licence from ASIC, be a member of the external dispute resolution scheme AFCA, give reasonable consideration to hardship requests and introduce caps on the maximum permitted default fees.
ASIC commissioner Alan Kirkland said the reforms were an "important step".
"We strongly encourage buy now pay later providers who do not already have the appropriate credit licence to apply for one as soon as possible," Mr Kirkland said.
"Providers who do not have their credit licence application accepted for lodgement by ASIC by 10 June 2025 may be engaging in unlicensed conduct if they continue to operate."
National Consumer Law Centre senior policy officer Rose Bruce-Smith said the changes set "a floor of consumer protection".
"It is a lighter touch regime than the full credit act, which is enforced for home loans, credit cards, everything else that is regulated."
Ms Bruce-Smith noted it had been ten years of Buy Now Pay Later services as a "fully unregulated credit product where customer outcomes were left to the private market", so any regulation was welcome.
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