Afterpay announces huge change to how customers make payments

The buy now pay later service's updated policy will kick into gear on June 18.

Stewart Perrie
·Senior Journalist
Updated ·3-min read

Afterpay has announced a huge change to the way customers can pay for their purchases.

Currently, you have to cough up the first bit of cash (25 per cent of the purchase price) upfront and the next instalment comes exactly two weeks later.

But under changes to the buy now pay later (BNPL) service's terms and conditions, users will have more time up their sleeves before paying for their purchases. Aussies will be allowed to choose the day of the week that they hand over their money from June 18.

Certain customers will also be permitted to delay their first payment by as much as two weeks on eligible orders.

Man holding wad of $50 notes next to someone holding a phone that says Afterpay
Afterpay has announced changes to its payment service that will hopefully allow customers to manage their finances more "efficiently". (Source: Getty)

Do you have a story about BNLP services? Email stew.perrie@yahooinc.com

“The good news is that more customers will gain access to this benefit,” Afterpay revealed in a memo to customers. “We can decide whether to grant you access.

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“We may remove access if you’ve failed to make a payment on time or where we otherwise reasonably need to do so.”

Afterpay's change will allow users to better align their payments with when they get paid from their jobs. If you don't select a preferred payment day, one will be automatically selected for you.

University of Sydney Business School Associate Professor Andrew Grant said a big reason for people missing their payments is "mismatched pay cycles" and believed this change from Afterpay was "sensible".

Afterpay has specific criteria when deciding who it allows to delay their first payment by two weeks.

It revealed it will consider the following factors:

  • If you have held an existing Afterpay Account in Australia for more than 1 year

  • If you have requested or received financial hardship assistance in the past year

  • If you have not had more than 5 payment declines within the past 6 months.

Afterpay hopes these changes will help customers manage their finances "more efficiently", especially considering how much criticism these BNLP services have received in the past.

A report from Anglicare Tasmania last year found there was a sharp increase in the number of people with BNPL debts seeking help from financial counsellors.

“This is a growing problem. Buy now, pay later debts are more common than a year ago and many people are struggling to repay them,” Anglicare Social Action and Research Centre researcher Dr Alexandra King said.

“BNPL debts add another layer of complexity and difficulty to an already-complex picture of indebtedness. The average value of BNPL debts amongst clients was $2,200.”

Data from Google shared with Yahoo Finance in December also showed the second-most-popular search term relating to bills was 'Can I pay for bills with Afterpay?' while 'Can I pay for groceries with Afterpay?' was ranked third for groceries searches.

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