Major Regulatory Overhaul for Buy Now, Pay Later in Australia

0

This legislative shift mandates BNPL providers to secure an Australian credit license and adhere to existing credit laws overseen by the Australian Securities and Investments Commission (ASIC), which includes conducting thorough financial evaluations of consumers. The initiatives aim to protect consumers from engaging in potentially harmful financial agreements by enforcing greater accountability from BNPL operators.

BNPL products have emerged as Australia's third most utilized credit service, prominently trailing credit cards and home loans. However, the regulatory update will now influence how BNPL transactions appear on individuals' credit reports, potentially affecting consumers' credit scores due to mandatory credit checks and detailed reporting of individual repayment histories.

The demographic heavily engaged with BNPL includes young consumers, with Millennials accounting for a significant portion. Despite the popularity, a portion of this demographic remains unaware of BNPL’s impact on their credit profiles.

With the new regulations, BNPL transactions are integrated into broader credit checks. Consumers are being advised to stay vigilant, ensuring timely repayments to protect and possibly enhance their credit ratings, thus improving their eligibility for more traditional credit products in future.

Industry experts like Elsa Markula emphasize the importance of these regulations in providing transparency and promoting responsible consumer behaviour. Markula notes that these changes can serve as an opportunity for individuals, particularly younger Australians or those new to credit, to bolster their credit profiles when managed astutely.

Looking ahead, consumers should regularly monitor their credit reports and remain informed about updates from their BNPL providers. The message is clear: use credit wisely and only apply when absolutely necessary to avoid signalling financial distress to lenders.

Published:Tuesday, 10th Jun 2025
Source: Paige Estritori

Share this news item:

Finance News

Clear

US Involvement in Israel-Iran Conflict Sparks Financial Market Concerns 23 Jun 2025: Paige Estritori The escalating likelihood of the United States engaging militarily in the Israel-Iran conflict has raised alarm among investors, potentially leading to significant market volatility. This concern was highlighted by the global financial advisory firm, deVere Group, as tensions heighten in the Middle East. - read more

Global Markets Brace for Oil Price Surge Following US Strike on Iran 23 Jun 2025: Paige Estritori The recent US military attack on Iranian nuclear facilities has raised expectations of a significant oil price spike as global markets prepare to resume trading. Announced by former President Donald Trump, the attack marks an increased US involvement in the Middle East, which analysts believe could lead to heightened volatility across financial markets. - read more

Trump Mulls Change of Heart on Firing Fed Chair Powell 21 Jun 2025: Paige Estritori US President Donald Trump is once again contemplating the dismissal of Federal Reserve Chair Jerome Powell, whom he has criticized for not lowering interest rates. Trump expressed his dissatisfaction with Powell's decisions in a Truth Social post, suggesting he might change his mind about firing him. Despite acknowledging that his strong criticisms make Powell's task challenging, Trump remains focused on his agenda for reduced rates, especially with Powell's term set to end in May 2026. - read more

APRA Clarifies HELP Debt Considerations in Home Loan Assessments 20 Jun 2025: Paige Estritori The Australian Prudential Regulation Authority (APRA) has released pivotal updates to the Prudential Practice Guide APG 223 and Reporting Standard ARS 223.0, focusing on how Authorised Deposit-taking Institutions (ADIs) should integrate Higher Education Loan Program (HELP) debt into home loan evaluations. The changes are aimed at enhancing regulatory clarity and acknowledging the individual circumstances of borrowers, including the nuances of their HELP debts, without compromising prudent lending practices. - read more

Economic Unrest Spurs Increased Reliance on Financial Advisers 20 Jun 2025: Paige Estritori In the face of ongoing economic turmoil encompassing inflation, market volatility, and other financial stresses, a global survey from Natixis Investment Managers, conducted by CoreData Research, has highlighted a growing trend: investors are increasingly relying on their financial advisers. With 91 per cent of surveyed investors expressing trust in their financial advisers for investment decisions, this highlights an unmistakable shift amidst financial uncertainty. - read more