What Is The Advantage of AfterPay?

tik tok on 24/08/2020 - 14:36
Last edited 24/08/2020 - 14:36

I recently thought of checking out after pay - the way it works is if I use afterpay for a $100 item, I need to pay them 4 equal payments of $25 every week. If I have a credit card, I can still keep that $100 in a savings account, earn a few cents before the billing cycle and pay my credit card the same amount of money and even earn some points.

What is the advantage of AfterPay ?

If a person had the same amount of dedication towards payments, wouldn't just a credit card suffice ?
I understand afterpay as an option for people who don't have a credit card - out of choice. Other than this what appeals to people about after pay ?

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Comments

        • awhc on 27/08/2020 - 22:54
          +2

          Why?

          a.) Is there a difference?
          b.) It is my choice.
          c.) Please explain the big problems I must have if I choose to split payments using afterpay over using a credit card.

          AP charges merchant fees 3-7% whereas credit cards charge 0.5-3%.

          In the end the merchants will pass on those fees to consumers by increasing their prices. I would rather use credit card than AP so I do not contribute as much to the increase in prices. Plus on credit cards I get points which should somewhat cover the increase in prices by the merchant.

          We should all boycott BNPL to help keep the prices lower :)

        • SeVeN11 on 28/08/2020 - 22:21
          +1

          I do this too and the pay afterpay with my credit card so I get to float the credit over a much longer period and get all the benefit of credit card points.

          Unfortunately afterpay charges retailers 4-6% for their service and it's likely retailers will pass this cost to consumers, unless they want to eat 4-6% margin compression.

        • techno2000 on 25/08/2020 - 11:26
          +26

          No problem.I will shove it.But we would like the benefit of your wisdom.Could you please inform us of the benefits of splitting up a $200 purchase while having 500k to a million dollars in your bank account or offset?

          • SeVeN11 on 28/08/2020 - 22:28

            @techno2000: Any $ in your offset account reduces your interest that you have to pay in your mortgage.

            If I can 'float' say 10k in a credit card, i.e have a balance of 10k on the card all the time and not pay any interest in it.

            If my mortgage rate is 2%, then I would save $10,000 x 2% = $200 per year because the 'float' would be sitting in my offset as oppose to paid in the retailers bank account.

            This might not sound like a lot now, but mortgage rates wasn't always 2%.

        • witsa on 25/08/2020 - 18:08
          +2

          You bought a house last year and have already paid it off?

          • gesco on 26/08/2020 - 07:52
            +1

            @witsa: Guess he means that he has enough in the bank for another deposit.

            • witsa on 26/08/2020 - 14:52
              +9

              @gesco: Owing 75% of your propertyb to the bank is hardly having no debt.

        • R4 on 26/08/2020 - 20:35

          Relax turbo - don't take this stuff seriously.

          Pathetic.

      • AustriaBargain on 25/08/2020 - 16:34

        It’s just saving in reverse. It’s no different to a credit card with a $1500 limit, basically all stores accept it now.

      • AustriaBargain on 26/08/2020 - 23:59

        Some of us don't like to dip into savings or other money we're setting aside for something else. It makes no difference to the balance sheets, but psychologically it is different money that shouldn't be touched.

    • mubd1234 on 24/08/2020 - 19:55

      For a second there I thought you were making a joke about Australia Post smashing parcels until I remembered what the thread was about…

  • Ginag on 24/08/2020 - 15:05
    +2

    is there a fee on top of the $25 every 2 weeks? I think there was when I last looked into it, as I had the same thinking as you. I concluded best to buy outright for some reason rather than afterpay. I would double check to see if there is an admin fee? if so, and you can afford the $100 item then not worth paying afterpay.

    • adam on 24/08/2020 - 19:49

      No fees from Afterpay. Some other services have fees.

    • Brendoo on 25/08/2020 - 07:24
      +27

      The regular fees go to the retailer, this is how AfterPay makes most of its money.

      Retailer absorbs that cost by raising prices of their products, so even non-AfterPay customers are paying AfterPay fees indirectly.

      Very smart model by Zip and AfterPay, essentially getting retailers to give them hundreds of millions of dollars and retailers falling at their feet to do it. Plus a bit of money from customers who are late paying.

      • MrBear on 25/08/2020 - 09:49
        +7

        so even non-AfterPay customers are paying AfterPay fees indirectly.

        You could say that about any part of a business that marks up their buy price with a percentage to sell it at. e.g. staff wages, rent, credit card transaction fees. Don't just point the finger at afterpay.

        All businesses pass on the cost of doing business on the things they sell. That's part of business, it's not one customer is made to pay for a thing another customer uses.

        • valleyrain on 25/08/2020 - 19:45

          it's not one customer is made to pay for a thing another customer uses.

          except that it is. No one is denying that things like staff wages, rent, credit card transactions fees add to the markup and so does Afterpay. It is one of the reasons why e-commerce businesses don't have a lot of markup.

          • MrBear on 26/08/2020 - 09:20
            -6

            @valleyrain: No, it is just another cost of business. A cost is a cost, doesn't matter where it is derived from.

            • valleyrain on 26/08/2020 - 09:29
              +4

              @MrBear: Yes, it is a cost of business, but what is wrong in pointing out Afterpay adds to that cost?

            • brendanm on 26/08/2020 - 17:03

              @MrBear: Normal people shouldn't have to pay more for goods simply because zoomers "need to have it now".

      • [Deactivated] on 25/08/2020 - 16:34
        -1

        That's like you're saying you're paying the staff wages, or their rent, or the electricity indirectly, which is like saying your employer pays your kids pocket money, or your internet bill indirectly. It's not true.

      • AustriaBargain on 25/08/2020 - 16:38
        +3

        Actually retailers make money by selling more items. More profit is more important than higher margins. Giving some margins to Afterpay can be worth it if it overall increases profit because of increased sales. Lots of people are now buying more expensive things instead of more cheaper things, at stores they don’t normally shop at, because of Afterpay. That means they are new sales that wouldn’t have occurred in the first place if it weren’t for Afterpay. It’s no different to accepting credit cards increasing sales from customers who only buy their medium ticket items on their credit cards. Yes the fees for credit are higher than eftpos, but if you only offered eftpos then you wouldn’t have made that sale in the first place.

        • valleyrain on 25/08/2020 - 19:48
          +5

          Yes the fees for credit are higher than eftpos, but if you only offered eftpos then you wouldn’t have made that sale in the first place.

          There is the choice to use credit card with an additional surcharge. The eftpos option doesn't have the surcharge. There is no such difference with Afterpay. The retailers may be selling more, but as a customer I'm paying more as well.

        • stewy on 26/08/2020 - 01:54
          +4

          The sorts of people using Afterpay the most are likely the same ones that were already living pay cheque to pay cheque. So Afterpay is really only helping them spend a few weeks earlier than they would have already spent their money.

          i think initially retailers will see sales growth, especially if their competitors aren't offering it, but eventually it will just end up being an added cost on them doing business that doesn't really give them the gains they need to be able to absorb the cost without passing it on.

          • Ti-au on 26/08/2020 - 16:10
            +1

            @stewy: I have $XXk in my bank account.

            I used afterpay to buy some expensive computer parts.

            I would say hardly living paycheck to paycheck.

        • Reppunkamui on 26/08/2020 - 02:26
          +4

          "Actually retailers make money by selling more items."

          Actually, retailers make money based on both quantity and margin. More sales does not mean more profit particularly when margins are reduced.

          Afterpay costs around 6% vs 1.5% for credit cards, and unlike credit cards, the costs (surcharge) cannot be transparently passed on to the specific consumer. Definitely will result in higher costs for everyone.

          • ilikeradiohead on 26/08/2020 - 03:06

            @Reppunkamui: Some customers can be more profitable than others. Those that pay with Debit card are probably the cheapest, then CC, then afterpay (Idk about cash, I assume it costs more than debit but less than credit), but if they can still profitably service a customer with a higher fee then they should. If Afterpay can show that overall profits increase for retailers, then retailers and customers benefit.

            There are a myriad of other costs than just at the point of sale. Customers who return items more frequently are expensive. Customers who call customer expensive are more expensive. Afterpay is just one part of the cost of doing business for retailers.

          • AustriaBargain on 26/08/2020 - 03:07

            @Reppunkamui: When the margins on most of the products are 30+%, less on premium stuff like Apple, then 6% isn't so bad. And if you don't offer Afterpay then your Afterpay customers will just buy from somewhere else, then you get zero percent profit from that customer. But at least you didn't have to pay 4.5% to Afterpay, but that's kind of like cutting off your face just to spite your own nose. Business isn't zero-sum game, you don't necessarily win by making others lose.

        • MrBear on 26/08/2020 - 09:22

          Actually retailers make money by selling more items.

          Wow, did you go to business school to learn that?

        • suti on 26/08/2020 - 18:28
          +1

          "Actually retailers make money by selling more items."

          More likely it cannabalises an existing sale through a cheaper channel (cash, credit card) which doesn't charge 6%+ plus commission.

      • Nebargains on 25/08/2020 - 17:43
        +1

        Retailers are not raising the prices of items because one payment method has a fee… can you provide one example?

        • AustriaBargain on 26/08/2020 - 01:58

          If they hired more attractive salespeople that’d also raise their cost of doing business. What of it?

      • AustriaBargain on 27/08/2020 - 00:02

        If lending people up to $1500 at a time was easy, every retailer would have been doing it. But they can't, it's not easy, it's super hard, most businesses have no interest in debt collection and wouldn't even know where to start. If you could lend customers money to buy something you're selling and be sure you'll get it back in two months, then that's a good thing. Shops couldn't do that, but now with afterpay they effectively can. Would you lend $1500 to a stranger? To a customer? To a friend? Then why are you pretending like what Afterpay is doing isn't anything special.

      • spaceflight on 27/08/2020 - 22:36
        +1

        Plus a bit of money from customers who are late paying.

        More like 24.4% if afterpays income from late fees

        A report from the Australian Securities and Investments Commission (ASIC) revealed that Afterpay earned 24.4% of its income from late fees — and 75.6% from merchant fees

      • greatlamp on 29/08/2020 - 09:20

        They probably have data to show retailers who offer afterpay make more sales. Retailers spend on printing catalogues, fake news stories on A Current Affair, radio, discounts, loss leader junk in the front window.

        For all we know afterpay might have a better return than traditional promotions

  • Ginag on 24/08/2020 - 15:08
    +14

    Choice has a good article on what to look out for https://www.choice.com.au/shopping/online-shopping/buying-on…
    Note - if you pay for everything with afterpay you may get this false sense of economy that you have lots of money, and then end up with lots of debt. Just word of caution :)

    • Geillis on 24/08/2020 - 15:22
      +2

      Thanks for posting this. Anyone thinking of using AP should at the very least read the section-
      Cancellations, refunds and disputes

  • terlalu on 24/08/2020 - 15:14
    +9

    afterpay is great if you can't get a credit card because of poor credit history or don't earn enough etc.

    • techno2000 on 24/08/2020 - 15:18
      +23

      I would suggest that person save $500 first and he never needs to afterpay again because remember all you are doing is just buying 45 days time.

      • AustriaBargain on 25/08/2020 - 16:40

        If the merchant offers Afterpay anyway then why would you recommend that, what difference does it make three months from now which payment method was chosen.

        • Ughhh on 25/08/2020 - 17:20
          +3

          Having an BNPL account may affect your credit profile if you're looking for a home loan in the future.

          Saving for the $500 first and not using BNPL can teach yourself about controlling your impulses. Once you've saved up, then reward yourself.

          • AustriaBargain on 26/08/2020 - 09:28

            @Ughhh: Why not control your impulses and save up for a house first and not borrow money from the bank to buy it?

          • Ti-au on 26/08/2020 - 16:15

            @Ughhh: It only affects your credit profite while you are paying it off.

            A credit card is their permanently (until you cancel the card).

            One could argue a CC is a worse hit on credit profile.

            • Ughhh on 26/08/2020 - 16:24
              -1

              @Ti-au: When my secondary bank called me to get me to refinance with them, he asked if I had Afterpay etc. I won't say more, as it doesn't favour me.

              Unless you have a credit card debt, it'll just affect your borrowing power.

              • Ti-au on 26/08/2020 - 16:42
                -1

                @Ughhh: I'm a (partially) backend credit advisor. I know exactly what effect afterpay has on credit decisions, because the Business Development Managers tell us directly (and we can see it with servicing).

                Retail credit decisions are done by algorithm. You pretending that having afterpay means something is complete Bullshit.

                If you were denied the loan it wasn't because of afterpay - it was probably because you don''t fit their servicing (and having afterpay - they would of said come see us after 8 weeks and we can approve your loan).

    • Quantumcat on 24/08/2020 - 17:31
      +1

      If you don't earn enough, better to save up for your expensive item than to have money taken out of your account when you don't have much and unexpectedly not be able to pay rent or for food

      • mubd1234 on 24/08/2020 - 19:59
        -1

        There's no such thing as someone with a clean slate credit history not being able to get a credit card just because they "don't earn enough". When I was getting $215 a fortnight on Youth Allowance, I was able to get a $500 limit CommBank credit card. I never used it, but it helped me build a bit of a credit history.

        • Ti-au on 26/08/2020 - 16:18
          +1

          Very wrong. There is No positive credit reporting in Australia. It is Negative reporting.
          Meaning they (Banks, etc) see defaults and now, the limits.

          In the US its different.

          Positive credit reporting is a shit system and Australia should NEVER of implemented it.

          • mubd1234 on 26/08/2020 - 20:05

            @Ti-au: Well, that's all well and good if you change banks every 5 minutes, but you're saying that if I wanted to take further credit out with the Commonwealth Bank, like a personal loan, car loan, home loan, new credit card, etc. they wouldn't take any previous internal bank credit applications and payment histories into account?

            • Ti-au on 27/08/2020 - 03:37

              @mubd1234: Well my understanding with credit cards (which I haven't looked at in 5+ years) is that they now have to make sure finance is affordable for you - so probably they are going to pull your credit file anyway.

              In terms of internal - they would look at the last 6 months. You could have 1 missed payment before automatic decline. They all basically ran the same system.
              So your ->payment<- history was useful for a total of 6 months at any one time. Had it for 15 years with zero missed payments and then had missed 2 payments? = NO. So much of the 14.5 years worth of credit history you have is worth SFAll.

              And you could of just gone to another bank who would of run your wage through the Algorithm and offered you X amount, which probably would of been the same amount or higher.

              CBA offered the $500 cards to every tom, dick and harry as a way to cement the relationship with you. The did it like they do the dollarmites program - 46 per cent of Australians open their first bank account with CBA & 36% keep their account for life.
              The $500 was offered to young people (uni students, apprentices, dole'ys) so they would get their 1st mortgage with CBA.

          • hamole on 27/08/2020 - 16:49

            @Ti-au: There has been positive credit reporting in Australia since 2018.

            https://www.creditsmart.org.au/learn-about-credit/comprehens…

            • Ti-au on 27/08/2020 - 17:18
              -1

              @hamole: How many Big Banks (Big 4) shard data via the positive credit reporting regime when it 'turned on'? (CCR was actually introduced in 2014, so your 4 years too late).
              I'll help you out - Zero.

              2018 and Big 4 had to provide positive credit information (which is a complete misnomer) on only 50% of customers, with a lot of carve outs.
              And it was only by 1st Oct 2019 that Big 4 had to share data on 100% of customers (90 days AFTER June).
              So they have only been running CCR for 11 months.

              Comprehensive credit reporting is very bad, but I guess Turnbull had to pay his investment banker mates back somehow…..

              • hamole on 27/08/2020 - 19:08
                -1

                @Ti-au: Which is very different to "there is no positive credit reporting in Australia"…

                • Ti-au on 28/08/2020 - 03:58

                  @hamole: Well actually its NOT positive credit reporting - its called comprehensive credit reporting.

                  And its still not positive - pull your credit file up and it doesn't say "He hasn't defaulted in 15 years" (aka Proportion of trades never delinquent/ derogatory).
                  Rather it says "he has had 4 missed payments over the past 2 years", which is NEGATIVE.

                  Additionally it will not store account balances, but rather credit limits.
                  So even if you keep your account balance at $0 for 12 years, you won't be assessed on that , but rather as though you are in debt based on total credit limit.
                  Again this is NEGATIVE.

                  CCR actually excludes the positive credit information (compared to USA).

      • AustriaBargain on 25/08/2020 - 16:41
        +2

        Suggesting that every poor person can’t budget their money.

        • Quantumcat on 25/08/2020 - 19:08
          -1

          If they can budget their money they can save up for things - afterpay is like payday lending if you are doing it because you don't have the dollars in your account

          • AustriaBargain on 26/08/2020 - 09:29

            @Quantumcat: It’s also nice to use after pay when you know an order is going to take a month to arrive. Psychologically it is nice to not pay full price for something and not see it for a month or longer.

            • Quantumcat on 26/08/2020 - 10:14

              @AustriaBargain: That's true but doing it for that choice and not because you have to because you don't have the money otherwise are two different things

              • Ti-au on 27/08/2020 - 04:08
                +2

                @Quantumcat: I really hate this paternalistic attitude in a way. "I hold: if you use afterpay you can't save and you can't afford it".

                Well what happens if I can afford and want/need it now, but would rather smooth out my payments?

                Why can't I buy a laptop over 4 payments if I need one? Why do I have to save for 2 months before I'm ALLOWED to buy one?
                Is the efficacy of having a laptop for 8 weeks higher than not having one?

                Afterpay customers are Adults, stop treating them as Children.

                • Quantumcat on 27/08/2020 - 08:40

                  @Ti-au: Afterpay traps you in a cycle just like payday lenders. If you can use it just once only to get a laptop that you need right now, say for study, that's fine. But people with little income get into the cycle of using it for all their toys because it doesn't feel like they've really spent money, and it catches up to them. I know someone who got into a trap like this.

                • Carmen Sandiego on 23/09/2020 - 09:48

                  @Ti-au: This!

                  I have more than enough money saved for a house but, I don't because (profanity) the housing market right now.

                  I have a credit card as well as ZipPay and Afterpay. These things aren't mutually exclusive.

                  I throw my ZipPay onto my debit card, and Afterpay onto my credit card.

                  I do this because I get paid monthly and some deals are time sensitive.

  • Drakesy on 24/08/2020 - 15:56
    +7

    It's one part the reduced psychological burden placed on someone when they make a purchase by breaking it up into multiple smaller burdens (similar to credit cards) and one part providing credit to those with bad credit ratings.

    At the end of the day it's another company enabling those who have sub par money management skills, similar to Harvey Norman and his interest free offers, preying on those with the least amount of money. But with added new age marketing that's hip enough to be popular with gen y/z.

  • Diji1 on 24/08/2020 - 16:01
    +21

    Many people live in a child like state where they pay for things that they cannot afford as though they were being given money rather than lent it. Often these people speak about "retail therapy" and other fantasies.

    Even for people not living in a child like state Afterpay alters purchase decisions unconciously so that the victim loses more money compared to not having a credit facility - just like credit cards.

    It's a tool to manipulate the customer into losing money.

    There are many advantages for the vendor and arguably none for the victim.

    • AustriaBargain on 25/08/2020 - 16:46
      -4

      What does it matter though. If anything I think Afterpay teaches people how to save, it reinforces that just putting a bit aside for two months does get you what you want. In fact it forces you to save that money, or else face a fee. Each payment is preceded by a text message reminder to make sure you have the munz or you can pay it early. It’s a very flexible and low risk introduction to saving/credit. It increases the immediate purchasing power of all Australians, letting them buy rich man’s boots that will last decades, instead of poor man’s boots that won’t last a season.

    • Ti-au on 27/08/2020 - 04:29

      So whats your solution diJi1 ?

      Ban people from using it? Reduce peoples access to credit, because you have decided that they live in a child like state?
      Should we ban those same people from anything that might hurt them?

      It kind of reminds of a mechanic firm that use to offer credit for car repairs in a poor black community The rates were extremely high, after multiple complaints from left leaning groups (such as trade unions, etc) the city council basically told him either stop charging or we will hit you with environmental fines. He went to all cash (the footage of the Council meeting were full of people making your argument - "people wouldn't use him, if they knew the real rate" ).

      They stopped offering it. Later a study found unemployment actually spiked in Winter, because people couldn't get their car to work.

  • tsunamisurfer on 24/08/2020 - 16:11

    How does AfterPay work as a customer?

    Do you get given a credit limit and you can buy whatever within the limit? and does the credit limit keep rolling when you hve made repayments?

    • wannagrababargain on 24/08/2020 - 16:17
      +1

      Every purchase (or 'order') is paid off by 4 installments due every 2 weeks, which are automatically charged to your debit/credit card on the due date(s) if you haven't already made the payment manually. If payment can't be process, late fees are applied (up to a late fee cap being the lesser of 25% of order value or $68) on each order.

      • Brendoo on 25/08/2020 - 07:31
        +1

        But how do they determine your credit limit? I assume you need to be approved based on at least proof of income (sending them your pay slips from work and past months bank statements)?

        e.g. if you have no job and no money can you buy an $8,000 high-end TV with no ability to pay it back? Surely not?

        Or is there some kind of limit for everyone, such as AfterPay cannot be used for anything that costs over $500?

        • Holty07 on 25/08/2020 - 10:08
          +1

          The limit is generally between $1000 and $1500

        • KateMC on 26/08/2020 - 13:21
          +2

          There’s a limit. Mine is $2000, and I can only spend $1000 in one transaction.

          I didn’t have to give them bank statements or proof of employment. Just answered some basic questions, provided ID, and they did a credit check.

          Zippay has a service called Zipmoney for people wanting to make larger purchases. For that one you do need to provide a lot more information, the equivalent of applying for a credit card.

    • D-Rebbs on 25/08/2020 - 11:44
      +3

      You start with a small limit of $500 I believe. Once you have demonstrated your ability to repay the limit increase. The limit is capped at about $2,000. The repayment history and increasing limits takes place of formal credit checks.

      The limit is just like a credit card where it is on the total amount outstanding. Afterpay have recently brought in the ability to repay early (rather than waiting for the fortnightly installments), so this can be used to free up limits for new purchases.

  • MeesusEff on 24/08/2020 - 16:19

    I did Afterpay for the 10 or 15% off ebay sale as I bought 3 Xiaomi Air purifiers. Split into 4 equal payments and they only charge extra if there is not enough funds when they try to take the money.

  • suti on 24/08/2020 - 17:21

    John Hempton reckons that they have no legal right to come after you if you fail to pay

    https://twitter.com/John_Hempton/status/1295266589193822208

    • brendanm on 24/08/2020 - 17:47
      +4

      Haha imagine putting your name to a story where you "earn" $300 a week from Centrelink, and have a $3k debt to afterpay.

      • [Deactivated] on 24/08/2020 - 19:14
        +7

        Renny said the temptation of the buy now, pay later companies was particularly dangerous for people her age because they have so little experience in the financial world.

        What the actual…

        Maybe I had the most comprehensive upbringing but I vaguely recall, "don't spend what you don't have".

        • brendanm on 24/08/2020 - 19:59
          +2

          Yeah I recall similar things. Methinks Renny had to have shiny new things to show off on instabook.

    • Zephyrus on 25/08/2020 - 22:46
      +3

      Who is John Hempton?

      Your comment pretty much said "Some dude reckons they can't enforce their loans"

      100% they can, they can take you to small claims court.

      • cloudy on 26/08/2020 - 23:20

        Who is John Hempton?

        I've spoken to him, he is proabbly one of the smartest guys i've spoken with.

        • Zephyrus on 27/08/2020 - 09:28
          +1

          So some guy some dude thinks is smart? Has he done anything notable? An expert on anything?

          99% of seeming smart is confidence.

    • trongy on 26/08/2020 - 18:42

      Question: why doesn't she just default. There is no cost to default except that you cannot use Afterpay again.

      I don't know if he's correct about not having the right to legal enforcement. Even if he's wrong, I doubt they would be taking people to court of debts of $1000-3000. It wouldn't be cost effective.

      That doesn't stop them from using debt collectors which can be highly stressful. I wouldn't call be harassed by debt collectors a "no cost" option.

      It appears that they currently don't work with credit rating agencies. That could change in the future which would be bad news for anyone who's defaulted on Afterpay debts.

  • brendanm on 24/08/2020 - 17:44
    +9

    It's to trick numpties into buying more rubbish they don't need, because instead of it being $1000, it's only "$2 a day" or whatever they claim.

    • Hybroid on 24/08/2020 - 18:08
      +5

      Close but not quite. It allows you pay for items in 4 fixed interest-free installments fortnightly. This effectively allows you spread costs over 2 monthly salaries for those that prefer to hold onto free cash.

      There is no additional cost if you setup automated payments. Do agree it should only be used if you know you have the funds available to pay outright anyway and not as a mechanism to obtain credit.

      • brendanm on 24/08/2020 - 18:33

        It's still just another thing to make people think they are paying less for something because they are paying for it in smaller parts. It has be be paid for somehow, so are the fees for missing a payment very high, or is it added to the cost of the product? If added to the cost of the product, it's a bit rubbish that others have to pay for this crap.

        • Hybroid on 24/08/2020 - 18:41

          No impact on product cost, same as buying via any other method.

          If you don't setup auto-payment and forget to manually pay, it's a flat $10 late fee and further $7 if still unpaid after 7 days.

          Less than $40 purchase cost is capped at $10.
          More than $40 purchase cost is capped at 25% up to $68 max.

          It's actually quite reasonable, especially if you don't own/want a credit card (me).

          • brendanm on 24/08/2020 - 20:01

            @Hybroid: So how are they making money? Does the retailer have to pay? Why not just get a credit card and actually get points/extra insurance etc, and not have afterpy show up on a credit report?

            • Hybroid on 24/08/2020 - 20:43
              +2

              @brendanm: Merchants are charged 30 cents plus 4-6% commission for every transaction they make via AfterPay. The flipside is they get paid full amount straight away even though we pay in installments.

              I don't like the idea of credit cards or chasing points. Afterpay works for me though for large purchases e.g. $2000 bicycle. While can pay it off straight away, it's easier to pay $500 every 2 weeks instead.

              • brendanm on 24/08/2020 - 20:45

                @Hybroid: How is it easier to pay it off over 2 weeks though? That's what I don't understand. You either have the money, or you don't?

                • Hybroid on 24/08/2020 - 20:55
                  +3

                  @brendanm: Over 2 weeks it doesn't make a difference at all but over 2 monthly paychecks it does.

                  31 July - Monthly salary
                  06 Aug - Order and first 25% payment
                  20 Aug - Second 25% payment
                  31 Aug - Monthly salary
                  03 Sep - Thrd 25% payment
                  17 Sep - Fourth 25% payment

                  It just keeps more cash in your bank. Also refunds are processed a lot quicker and less outlay.

                  • brendanm on 24/08/2020 - 20:57
                    +2

                    @Hybroid: Refunds on credit card are instant. Maybe I'm old fashioned, but if paying for something over 2 weeks/months made a massive difference to my cashflow, I don't think I'd be buying it.

                    • Hybroid on 24/08/2020 - 21:00
                      +3

                      @brendanm: Fair enough. To each their own I suppose.

                      • brendanm on 24/08/2020 - 21:05
                        +4

                        @Hybroid: I just think it tempts irresponsible people to be irresponsible. You get idiots like the person in the article above, who get themselves into high debt in relation to the amount of money they actually make, that they then can't pay back.

                        • Hybroid on 24/08/2020 - 21:07
                          +3

                          @brendanm: I mean… credit cards do the exact same. Buy today, worry about paying it later, many get into perpetual debt.

                          Afterpay has a much smaller limit based on your income and estimated spent. Mine's just shy of $2,500 whereas ANZ wanted to offer me around $15k credit card but turned it down.

                          • brendanm on 24/08/2020 - 21:16
                            +2

                            @Hybroid: Credit cards are harder to get though, I doubt any banks would have been offering that girl a credit card on a $300 a week income.

                            • Diji on 25/08/2020 - 17:35
                              +1

                              @brendanm: You're very optimistic about the scruples of banks.

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