What is Humm and how does it work?

Finance Writer · 23 April 2021
Humm (formerly Flexigroup) is a buy now pay later service operating in Australia. Taking on the likes of Afterpay and Zip Pay, Humm allows you to pay for purchases over time, interest free, rather than paying in full upfront, with some fees applying.

With 2.6 million customers, we take a look at the service provided by Humm and how it compares to market leaders Afterpay and Zip Pay.

What is Humm?

Humm is an interest-free buy now pay later (BNPL) service. Similar to other BNPL providers, Humm lets you spread the cost of purchases into smaller fortnightly or monthly payments.

However, unlike other providers, which generally limit the amount you can spend to between $1,000 and $2,000, Humm gives you the potential to borrow up to $30,000 using two different digital wallets. With the first wallet, called ‘Little things’, you can spend up to $2,000, similar to how you would use Afterpay or Zip Pay. The second wallet, called ‘Big things’, is a pre-agreed amount for you to spend on big ticket items up to a potential $30,000. You will need to repay your ‘Little things’ balance in either five or 10 fortnightly repayments, while your ‘Big things’ repayments can be spread across monthly payments from six months up to five years, interest-free.

How does Humm work?

Humm gives you access to a ‘Little things’ wallet via its app as soon as you have signed up and been approved. The spending limit in your Humm wallet will depend on the background information you provide during the sign-up process and takes into account your ability to make the required repayments.

You can use your ‘Little things’ wallet to buy as many items as you would like, within your spending limit, either online or instore, wherever Humm is an accepted form of payment.

Your spending limit may be increased once you’ve built up a good repayment history or, if you provide further evidence to Humm, such as bank statements and payslips, to show you are able to manage larger repayments.

Your repayments for ‘Little things’ can be spread across 5 or 10 fortnightly payments, meaning you have up to 5 months approximately to pay off the balance.

To be approved for a Humm ‘Big things’ wallet, you need to apply via the app and receive approval prior to making any purchases. You can be pre-approved online or instore for amounts up to $5,000 (or up to $10,000 in some instances) in advance. However, if the item you wish to buy costs more than this, the application process needs to be completed instore, depending on what you buy and where you shop. If approved, you will receive a barcode on the Humm app indicating how much you can spend, up to a maximum of $30,000. If buying instore, you need to share the barcode with the retail staff member so they can process your payment. Pre-approval for a ‘Big thing’ lasts for 60 days, and is valid for only one transaction. Repayments for ‘Big things’ can be made over six, 12 or 24 months, as well as up to over 60 months.

Who can use Humm and how do you apply?

You can apply for Humm, as long as you meet the following criteria:

  • You must be at least 18 years old
  • You must be a permanent resident of Australia
  • You must have a permanent job (at least 25 hours a week) or you must be on an aged/veteran’s pension
  • You must not be insolvent (or declared bankrupt)

You can either download the Humm app or go to the Humm website to apply and will need to provide some personal details, including your name and address, as well as one of the following three ID documents for verification: your driver’s licence, your passport or your Medicare number.

How much does Humm cost?

Humm promises to never charge any interest. However, there are a few other fees to be aware of. For purchases of up to $2,000 from the ‘Little things’ wallet, Humm charges a monthly fee of $8 if you make repayments over 10 fortnights. This is waived if you pay over five fortnights. The Humm ‘Big things’ wallet also has a monthly fee of $8 and additional establishment fees which range from $35 – $90 for a first purchase and $22 for a repeat purchase. If you miss a payment, you will be charged a $6 late payment fee.

Where can I shop with Humm?

Humm can be used to shop either instore or online at participating retailers who have signed up to accept Humm as a payment option. Retailers such as Myer, Rebel, Retravision, Betta Home Living, Cotton On, Kogan, Ikea and Michael Hill all accept Humm, as well as some travel providers, trades, and technical products and services. Even some health providers, such as dental, audiology and IVF providers, accept Humm payments. The Humm website contains a full list of its partners.

Does Humm affect my credit rating?

Humm states that it will take a few things into consideration when assessing applications. It may take a look at your credit score when you apply, but simply applying for Humm won’t affect your score or leave a record on your credit file, the provider says.

It’s worth noting that your credit score may be affected in other ways if you use a BNPL service, according to ASIC. This is because if you take on more credit than you can afford and can’t keep up with repayments, your BNPL provider may report any late payments or defaults to credit reporting agencies, much like a bank might if you missed a loan repayment.

Being late on bills, including BNPL payments, can lead to financial hardship. Currently, BNPL payments are not subject to Australia’s National Credit Code. So, customers for these types of services don’t have as much protection, and should be cautious in ensuring they can manage any BNPL debt they take on. If you’d like, you can check your free credit score with Canstar.

How does Humm compare to Afterpay and Zip Pay?

Comparing Humm to Afterpay and Zip Pay, the major differences are found in the spending limits and the repayment periods. While the Humm ‘Little things’ wallet and Afterpay offer a spending limit of up to $2,000, Zip Pay sets its limit at $1,000. Only the Humm ‘Big things’ wallet gives you access to a potential $30,000. You can pay off your Humm ‘little things’ wallet over five or 10 fortnightly repayments, while you can take up to five years to make monthly repayments to your Humm ‘Big things’ wallet.

Afterpay sets its repayments over four, fortnightly payments, starting at the time of purchase. Zip Pay allows you to set your own repayment schedule, offering up to three months interest free. However, if you want to avoid paying monthly fees of $6 with Zip Pay, you will need to clear any balance by the end of the first month. Humm charges an $8 monthly fee for its ‘Big things’ wallet and ‘Little things’ wallet if you choose to make repayments over 10 fortnights. Humm also charges establishment fees for any purchases you make from your ‘Big things’ wallet. There are no monthly fees for Afterpay.

Humm charges a $6 late payment fee. Afterpay also charges a late payment fee of $10 which is capped at 25% of the purchase price or $68, whichever is less. Zip Pay charges a late payment fee of $5.

All are accepted either instore or online at participating retailers. Afterpay and Zip Pay can also be added to an Apple Pay or Google Pay wallet and used where these payment types are accepted.

What should you watch out for when using Humm?

In November 2020, financial regulator ASIC released a report on the buy now pay later (BNPL) industry, which found that one in five consumers surveyed in the past year had missed or were late paying other bills in order to make their BNPL payments on time. Missed payments included things such as household bills (44%), credit card payments (32%) and home loan repayments (22%).

Canstar money expert, Effie Zahos, said users should heed the warnings and look out for red flags in their own spending behaviour. She offered tips to consumers who use buy now pay later platforms, such as Humm, and are keen to clear their debt.

In March 2021, a group of eight of Australia’s largest BNPL companies, including Humm, signed up to a voluntary ‘code of practice’. The code sets out the minimum standards the companies need to meet, including a cap on late fees, credit checks being required on transactions of more than $2,000 and a minimum age of 18 years for customers to be able to use the services. While some consumer groups have said that the code is a “positive” step, they do not believe it is an adequate substitute for government regulation.

What can I do if I can’t meet my Humm repayments?

If you find yourself in financial trouble and struggling to make your Humm repayments on time, it has a financial hardship page where you can complete an online form and they will get in touch to discuss your options. Canstar has a related article about how you can regain financial control if you are experiencing financial hardship. For example, financial counselling is available. You can call the National Debt Helpline (NDH) for support and advice on 1800 007 007. The NDH offers free, independent and confidential advice, and can connect Australians with individual counsellors and organisations near to them.

Cover image source: Peera.P/Shutterstock.com

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This content was reviewed by Sub Editor Jacqueline Belesky and Deputy Editor Sean Callery as part of our fact-checking process.

Katie covers all things personal finance for Canstar. Katie has worked with companies including American Express, Virgin Money and Hollard Insurance. She has contributed to publications including The Australian, The Australian Financial Review and The Financial Times.

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