Millennials latch on to deferred payments

Christmas shoppers are turning to new payment options to spread the cost of the festive season.

Over the past year, a number of new schemes have started operating: PartPay, Afterpay, Laybuy and Oxipay.

They allow customers to receive goods immediately and then pay off the purchase price over about six or eight weeks. No interest is charged and the fees are paid by the merchant.

A spokeswoman for Oxipay said there had been a sharp spike in registrations during November.

James Rohloff, spokesman for Laybuy, said his team were seeing a similar pattern.

‘‘During late November and December, Laybuy is adding an average of 1000 new users daily and between 40 to 50 new stores per week,’’ he said.

‘‘The trend for responsible spending and a disciplined repayment programme has resonated with all consumers and in particular the millennial market.’’

A spokeswoman for Afterpay said Trade Me was its most popular outlet – there are 1.5 million items listed on that site with Afterpay as a payment option.

Commission for Financial Capability personal finance editor Tom Hartmann said it was a better option than putting purchases on a credit card or hire-purchase deal.

‘‘I’m cautiously optimistic – these appear to be a savvy way of spreading out costs, what’s called ‘smoothing out consumption’ – if they are used as intended. Note there are penalties if you miss a payment, which would make it not worth doing.’’

But he said consumers needed to be careful not to overextend themselves with too many postponed-payment purchases.