Better protection for Buy Now Pay Later users

We need Buy Now Pay Later regulation to stop irresponsible lending.

With the cost of living adding pressure to many households, some vulnerable people are turning to Buy Now Pay Later (BNPL) lending services to make ends meet. 

BNPL can be a useful budgeting tool for some (23% of New Zealanders currently have a BNPL account), but because there’s no legal obligation on providers to check their customers can afford to repay the loans, they can quickly lead to debt spirals, bad credit ratings, and hardship. 

More than 1-in-3 BNPL users are making repayments on a credit card, which risks a double cycle of debt. Arrears are rising, and debt advisory services are seeing more and more struggling BNPL customers. 25% of households with incomes under $50,000 have been charged late or missed payment fees more than three times. 

The UK and Australia are moving to regulate BNPL, but in New Zealand the Government is still weighing up how it will regulate the sector. 

It’s time to stop lenders selling unaffordable debt to people who are already struggling. 

We need: 

  • BNPL products to be regulated in the same way as other forms of credit  

  • An obligation from BNPL providers to assess whether it is suitable and affordable to provide credit to people, without the risk of causing of financial harm   

  • Hardship programs that offer reasonable levels of support and communication for BNPL users, before escalating to debt collectors 

Read our submission on BNPL here. 

If you have BNPL, what do you mainly use it for?

“It would have been nice if they could have linked up all my BNPL accounts. If they saw I was struggling to pay my Afterpay, they could have linked up Laybuy and Zip and let them know I’m struggling, and not to let me use them again.” 

Laura, BNPL user

"Easily accessible high limits made it too tempting to just spread payments out, rather than fully realize the total amount I'm commiting to. At one point in my life I had multiple transactions through all 3 apps, which did require a financial buyout from another loan provider, as I was not allowing myself enough money for anything else." 


Daniel, BNPL user