New BNPL rules spark confusion over credit reporting
Buy now, pay later is now regulated under consumer credit laws, but its impact on users’ credit histories — and their ability to borrow — remains uncertain.
Despite new regulations on buy now, pay later (BNPL) schemes, confusion remains over the different types of instalment payments and their costs, according to Arca, Australia’s retail credit industry association.
At the heart of the issue is the distinction between traditional BNPL arrangements — typically low-value purchases paid off in a matter of weeks — and longer-term personal loan instalment plans, which can span years.
“Are installment plans like Afterpay? Should they be reported specifically as a BNPL facility? What about a five-year loan for solar panels? Products that look more like a personal loan with a zero-percent interest rate should be reported as a personal loan,” said Arca’s general manager of policy and advocacy, Michael Blyth, speaking to Capital Brief.
This is more than a technical question — it strikes at the core of responsible lending obligations, which were strengthened following the Hayne Royal Commission. While BNPL is now subject to these obligations, it faces a lighter regulatory burden than traditional credit products.
