True or false? “BNPL is unregulated”

Have you read a news article about Buy-Now-Pay-Later in the past year? Stupid question right? 

Afterpay, Zip and Klarna have dominated the news cycle for years now. More often than not, what you read is well researched, well fact checked and well written. However one statement or theme that continues to pop up is that ‘BNPL is unregulated’.  We’re here to ptu the microscope to that idea.

The suggestion that BNPL is unregulated often invokes ideas that BNPL exists in a wild west environment where they’re all competing to rip off their customers. The reality is that governments across the globe have recognised that BNPL can deliver significantly better consumer outcomes than traditional credit, and requires a different approach to traditional credit regulation. 

Funnily enough, Zip pay and Zip money IS regulated. Peter Gray, the co-founder of Zip, once said “We are currently regulated or overseen by ASIC, the ACCC, AFCA, AUSTRAC, the OAIC, APRA, Treasury, the ASX – and now, in addition, the RBA is making moves.”

On top of this Afterpay, Zip, Klarna and almost all other options are covered by AFIA’s BNPL Code of Conduct, which has enshrined consumer protection measures across the wider BNPL industry. 

This Code goes above and beyond the law, setting best practice standards to strengthen consumer protections. It also includes standards that traditional credit cards can’t meet such as preventing new BNPL products from being offered to those behind in repayments and prohibiting spending on gambling products. 

So is BNPL unregulated? Absolutely not.

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