Happier to pay now and wear cost later
SHOPPERS’ desire for instant gratification has seen a burst of “buy now, pay later” schemes flooding into brick and mortar and online stores, allowing the pain of paying to be delayed. Schemes including AfterPay, Openpay and zipMoney provide keen shoppers with a line of interest-free credit at participating retailers, and there’s no doubt it will be a popular way to pay this Christmas and fill Santa sacks.
Shopper Leslie Imbao, 34, uses AfterPay regularly as she juggles paying her mortgage and minimising credit card debt – she owes about $2000 now on plastic and doesn’t want to rack up more. “The most expensive thing I bought was a fur jacket for $800 and I have the payments linked to my debit card,” she said. “I’ve never been charged fees or late payments.” AfterPay figures show they now have more than 1.1 million customers shopping at more than 8600 retailers and about 85 per cent of their transactions are linked to a debit card, not credit.
The service allows customers to split payments over four equal instalments every fortnight by linking payments to your debit or credit account.
Retailer Openpay offers customers periods of up to 36 months depending on the amount to be paid off interest-free and is now available at more than 4000 locations in Australia and New Zealand and used by more than 200,000 shoppers.
From retail to automotive, home improvement and healthcare, it extends from users buying clothes to household goods.
Openpay chairman Avi Schechter said while it will be a popular way to pay in the lead-up to Christmas, he said it helps consumers plan their finances and “spread their payments over time so they spend responsibly”.
Certified financial planner Patrick Canion said this can be a good way to pay for consumers who find a bargain and don’t have the cash, but realistically, they should be better at saving.
He warns consumers that there are financial penalties if the items are not paid for in full by the end of the term.