Leslie Imbao uses Afterpay to buy goods now and pay later.
Camera IconLeslie Imbao uses Afterpay to buy goods now and pay later. Credit: News Corp Australia, David Swift

Consumers are turning to buy now, pay later schemes in droves to ease price pain

SOPHIE ELSWORTHNews Corp Australia

SHOPPERS’ desire for instant gratification has seen a burst of “buy now, pay later” schemes flooding into brick and mortar and online stores allowing the pain of paying to be delayed.

Schemes including AfterPay, Openpay and zipMoney provide keen shoppers with a line of interest-free credit at participating retailers and there’s no doubt it will be a popular way to pay this Christmas and fill Santa sacks.

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Shopper Leslie Imbao, 34, uses AfterPay regularly as she juggles paying her mortgage and minimising credit card — she owes about $2000 now on plastic and doesn’t want to rack up more debt.

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Leslie Imbao uses AfterPay to buy goods now and pay later.
Camera IconLeslie Imbao uses AfterPay to buy goods now and pay later. Credit: News Corp Australia

“The most expensive thing I bought was a fur jacket for $800 and I have the payments linked to my debit card, I’ve never been charged fees or late payments,’’ she said.

AfterPay figures show they now have more than 1.1 million customers shopping at more than 8600 retailers and about 85 per cent of their transactions are linked to a debit card, not credit.

The service allows customers to split payments over four equal instalments every fortnight by linking payments to your debit or credit account.

AfterPay allows shoppers to buy now and pay later and it’s popularity is continuing to soar.
Camera IconAfterPay allows shoppers to buy now and pay later and it’s popularity is continuing to soar. Credit: ThinkStock

While retailer Openpay offers customers periods of up to 36 months depending on the amount to be paid off interest-free and is now available in more than 4000 locations in Australia and NZ and used by more than 200,000 shoppers.

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From retail to automotive, home improvement and healthcare it extends from users buying clothes to household goods.

Openpay chairman Avi Schechter said while it will be a popular way to pay in the lead up to Christmas, he said it helps consumers plan their finances and “spread their payments over time so they spend responsibly.”

Openpay chairman Avi Schechter said these deals help ease the pain of paying.
Camera IconOpenpay chairman Avi Schechter said these deals help ease the pain of paying. Credit: Supplied

Certified financial planner Patrick Canion said this can be a good way to pay for consumers who find a bargain and don’t have the cash, but realistically they should be better at saving.

He warns consumers there are financial penalties if the items are not paid for in full by the end of the term.

sophie.elsworth@news.com.au

@sophieelsworth

Originally published as Buy now, pay later phenomenon