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Thanks to the rise of buy now, pay later (BNPL) options there has never been a better time to flex your consumer muscle and make the most of the many payment options available. However, once you have decided to utilise a BNPL finance platform, the inundation of options can make it hard to decide what is the right choice for you.
Here at Later Gator, we offer not one but eight BNPL platforms especially selected to suit our customers scope of needs. And, to help you work out which option is best for you, we have deciphered each BNPL platform so you can figure out which platform will work best for you.
The below info-graphic summarises, and be sure read on for additional detail.
The BNPL platform works by allowing you to purchase an item and pay for the cost of the item over time, making the investment of the item more manageable. This allows you to have the item that you want while paying it off overtime.
Before you sign up to a BNPL provider it’s important to acknowledge you are utilising finance from a third-party provider, not the store you are purchasing from. Once you have decided which platform works best for you, it is as simple as signing up with the provider, making your purchase, and then paying back what you have spent via scheduled payments.
In short, yes. The only exception is ZipMoney which will charge a pre-determined rate of interest after a specified interest-free period. So, if you were to pay off the purchase within your interest-free period you could avoid interest on this platform too.
If you are wondering how financial platforms remain viable without charging the consumer interest, the answer is simple - the BNPL platform charges the retailer a small fee every time their service is used. So this operational charge is passed to the store and bypasses you as the consumer.
This is an important one. How long you have to pay off your purchase will impact the size of your payments and how quickly you need to come up with the cash. For example, the longer you have to pay off your purchase, and the more repayments that are made, the smaller the incremental payments will be.
PayItLater and ZipMoney require the purchase to be paid off within a month of the purchase date, Laybuy’s terms are six weeks while Afterpay is eight weeks. ZipPay gives you from the end of the following month from the purchase date, which could be up to 60 days in total. LatitudePay allows up to 10 weeks to complete your repayments and Splitit allow you, the consumer, to pick how long your payment period will be. Openpay is the most flexible option here, giving you up to 18 months and beyond if you need it.
Good question. Afterpay, Laybuy, PayItLater, LatitudePay, and Splitit can all be ticked off as having no upfront or ongoing fees. Openpay does have fees for Openpay Plus users and long-term plans which may incur an additional processing charge too. ZipPay has no upfront fees, however, they will charge you $6 at the beginning of each month if there is an outstanding payment. ZipMoney has the same terms as ZipPay with the addition of an establishment fee which can range from $25 to $99 depending on the amount of your purchase.
When you sign up to a BNPL platform you commit to repaying the item back over an agreed amount of scheduled payments. The frequency does vary between providers with Laybuy, LatitudePay and PayItLater offering weekly repayments. Afterpay requires fortnightly repayments and Splitit is monthly. Both ZipPay and ZipMoney allow you to choose between weekly, fortnightly, and monthly repayments depending on how quickly you are able to pay off the purchase. Openpay is the only platform that puts the power back with the consumer, allowing you to select how frequent your repayments will be.
It is important to be mindful when acknowledging the payment frequency as Afterpay, PayItLater, and LatitudePay do not allow you to change your repayment schedule. Laybuy offers some flexibility, allowing you to select the repayment day so you can line up the repayment due date with your pay day for example, while Openpay, ZipPay, ZipMoney, and Spitit allow you to change your payment schedule as it suits you.
If you are unable to pay your scheduled repayment on time you can expect to incur late fees from BNPL platforms. The only exception here is Splitit, who do not charge late fees if for some reason you are unable to pay your scheduled repayment.
So just how much are you up for if you can’t make a payment? If you miss a payment with Afterpay you will be charged $10 initially and then an additional $7 if the repayment remains outstanding for seven days. Laybuy and Openpay, and PayItLater will also charge you $10 for a late payment plus an extra $10 if it remains unpaid for seven days. Both ZipPay and ZipMoney will charge you $5 after 21 days of the original due date. LatitudePay is one to watch here giving you a $10 fee is you miss a payment for a purchase under $50 and a hefty fee of up to $50 if your original purchase price was over $50.
Signing up to a BNPL platform is relatively easy. You will need to be an Australian citizen, at least 18 years of age, and have a valid and verifiable email address and phone number to start an account. It’s also a requirement that you have a credit or debit card, which you will use to make your purchase and repayments.
Some platforms do have additional requirements which can get a little tricky. ZipPay and ZipMoney will need confirmation that you are employed and are earning over $300 a week. While Splitit requires you to have the entire purchase amount available on your selected credit card (and not a debit card) at the time of purchase.
This is something important to consider if you plan on signing up to any kind of substantial loan like a new car or home loan in the foreseeable future. If you use BNPL platforms responsibly, paying off your purchases without penalty fees then it is highly unlikely your credit score will be affected. That said, if you incur negative activity on your BNPL account, the platform reserves the right to report this negative activity to credit providers, which could be the bank you are applying for a home loan with.
When it comes to checking your credit store before allowing you to sign up to their platform, Laybuy, ZipPay, and ZipMoney will check your credit score while LatitudePay, Openpay, and PayItLater may ask your permission to access your credit score. Afterpay and Splitit will not check your credit score.
BNPL platforms provide an invaluable service to consumers by allowing them to access the purchases they want while paying off the cost over time. When it comes to getting the most out of your BNPL platform it is important to understand the platform’s terms and stick to your scheduled payments.
For more articles comparing popular Pay-Later services, check out our Blog.