19 December 2019
AFIA, the leading industry voice of a diverse Australian finance sector with membership of over 100 financiers, announced today the rapidly growing Buy Now Pay Later (BNPL) market would start public consultation in mid-January, for implementation in mid-2020, of a Code of Practice for BNPL providers (BNPL Code). Often referred to as the ‘modern day lay-by’, it is estimated approximately 30% of Australian adults (5.8m) now use BNPL services for predominantly making small retail purchases and payments, with research also showing many customers, especially younger Australians, use BNPL services to help
manage their finances.
AFIA and its BNPL members – Afterpay, Brighte, flexigroup, Latitude, OpenPay, Payright and Zip Co –are responding to ASIC’s Report 600 and the Senate Economics Reference Committee, which recommended the development of a Code of Practice for the BNPL market. AFIA CEO, Diane Tate, commented, “The BNPL Code of Practice strengthens consumer protections for BNPL customers, while preserving customer choice to make purchases and payments in a way that suits their needs.
'Some customers want to use a credit card, some a debit card, and some a BNPL service – ease of purchases and payments and customer choice are really important, but innovation has to be matched with good consumer protections.
'The BNPL Code goes above and beyond the law by ensuring customers have strong safeguards in place that help them better understand the product and their rights. It also sets standards around helping those customers that experience financial difficulties.
'Importantly, the BNPL Code also means customers of BNPL services, that are members of AFIA, have access to the Australian Financial Complaints Authority (AFCA), the independent external dispute resolution scheme, if they have a compliant they can’t resolve directly with the BNPL provider', she said.
'The BNPL Code will be subject to a thorough public consultation process in early 2020, aiming for implementation by 1 July 2020. This is a world-first industry code of practice, so we have a tremendous opportunity, and responsibility, to get this right', Ms Tate said.
AFIA will conduct a six-week public consultation of the BNPL Code from mid-January 2020 and wants to hear from a range of stakeholders, especially customer groups, so the standards set make sense for industry and all BNPL customers. Depending on when it is published, ASIC’s latest BNPL review will also inform the Code’s development and future refinement.
AFIA aims to have the Code operating by 1 July 2020 but acknowledges this will be affected by the consultation process.
Executive Director, Communications
0429 238 613
Notes to editors:
AFIA members are financing Australia’s future. AFIA represents over 100 providers of consumer, commercial and wholesale finance in Australia. These banks, non-bank lenders, finance companies and fintechs provide specialised finance to meet the needs of businesses through right-sized and best-priced products, services and technologies that help mobilise working capital, cashflow and investment. They are also at the forefront of financial innovation in consumer finance.
AFIA members are a fundamental part of Australia’s competitive and innovative financial services industry. These specialised lenders promote simple, convenient, innovative, and affordable credit. This activity supports financial and economic participation by consumers and businesses, improving social participation and financial wellbeing and supporting the economic success of our nation.