Suncorp has announced that it will enter the growing Australian BNPL market, with the launch of its PayLater platform in November. The bank says that PayLater, available via the Suncorp app, will allow customers to make purchases at any location that accepts Visa, which is more than 70 million merchant locations worldwide.
Visa’s country manager for Australia, Julian Potter, said the company was “excited to partner with Suncorp”, noting the growing nature of the BNPL sector and adding that PayLater would be a “seamless and secure” experience for customers.
What is PayLater?
PayLater is a forthcoming buy now pay later service from Suncorp. It will launch via the Suncorp app in November 2021, and in what Suncorp describes as a first for the Australian market, customers will have the option of a physical as well as a digital card. Suncorp says that the physical and digital versions of the PayLater card will be yellow, to differentiate them from the bank’s existing ‘pay now’ debit card, which is green.
How does PayLater work?
PayLater will be available for purchases higher than $50, up to a limit of $1,000 once Suncorp determines a customer’s eligibility following a credit check. Suncorp says eligible customers will receive “quick approval” after applying online or via the Suncorp App.
Repayments will then be made in four equal fortnightly instalments. The platform will offer customers the ability to change their repayment day by up to six days.
How much does PayLater cost? Does it have late fees?
Suncorp says that PayLater has a two-day grace period for missed repayments, and then a capped $10 late fee per purchase. There will be no foreign exchange fees for international purchases online or in-store, and no ongoing fees when customers pay on time.
Is buy now pay later risky?
In its November 2020 report into the industry, the Australian Securities and Investments Commission (ASIC) found one in five consumers in the previous year had missed or been late paying other bills, such as household bills (44%), credit card repayments (32%) and home loan repayments (22%), in order to make BNPL repayments on time.
The same report also found a number of Australian consumers had experienced financial hardship in an attempt to make BNPL repayments on time, cutting back on or entirely foregoing household essentials such as meals, or taking out additional loans.
Therefore, before using a BNPL service, it is worth considering your financial situation carefully, and thinking about whether you are confident in your ability to make repayments. It is also worth asking yourself whether you need the thing you plan to purchase now, or if you can purchase it in another way, such as by saving money for it.
In March of 2021, a number of Australia’s major BNPL lenders signed up to a voluntary code of practice with ASIC, setting out minimum standards they are required to meet, including credit checks on transactions of more than $2,000.
Suncorp’s PayLater has a maximum limit of $1,000 for purchases, but the bank says it will still perform credit checks before approving customers for this amount. Likewise, Suncorp says that it has put rules in place to ensure that customers cannot use the PayLater service for cash advances or gambling transactions.
Cover image source: MadamF/Shutterstock.com
Thanks for visiting Canstar, Australia’s biggest financial comparison site*