The truth about Afterpay.
The truth
about Afterpay.
Get to know Afterpay and how we really work.
Get to know Afterpay and
how we really work.
Say no to revolving debt.
Afterpay is about enabling people to get what they want and need without the risk of long-term debt. Here’s how we protect customers:
We don’t
charge interest.
When you pay it in 4 instalments with Afterpay, it’s always interest-free.
We cap
late fees.
We don’t charge late fees as long as you pay on time. If you do miss a payment, you will incur a late fee, but these are capped at 25% of the order price, and will never exceed $68 per order, regardless of the order amount.
See below for more information on late fees.
We pause
accounts.
If you miss a payment, we pause your account and you won’t be able to buy or book anything else with us until your payments are up to date. You may notice your spending limit decreases too; this is because our real-time technology takes into account a range of different factors, including late payments, in deciding spending limits. Ultimately, all steps we take are to help you spend responsibly with Afterpay.
Afterpay in numbers.
$600
That’s where our spending limits start for new customers; low. They only increase with proven on-time payment behaviour.
$150
The average amount spent per Afterpay order.
$305
^
That’s the average Afterpay outstanding balance in Australia. By comparison, the average outstanding credit card balance in Australia is $3,039*.
98%
The amount of Afterpay orders that don’t incur a late fee.
37
Afterpay’s main customer is a 37 year-old.
One-third
One-third of our customers use Afterpay for health and wellbeing services, including dental and salon services.
Did you know?
Afterpay does not affect your credit score.
Afterpay does not affect your credit score or credit rating, full stop. We don’t believe that missing a payment with Afterpay should result in a bad credit history. Our main aim is to help you spend responsibly, and we take a number of steps to help ensure this, including pausing your account when you miss a payment. We have also started working with credit bureau Centrix as part of their new PayWatch initiative for the Buy Now Pay Later industry, which is designed to protect customers from taking on additional Buy Now Pay Later debt when they may be struggling with existing debts.
We use an approval process.
We apply an approval process for individual purchases. Our approval process takes a number of factors into account, including whether there are sufficient funds in your account (particularly for new customers), and how much you will have to pay on the purchase. We carry out this process on every order you make with Afterpay, not just the first one.
Spending limits start low.
Our spending limits for new customers start low, at around $600, and may increase gradually over time with consistent on-time payments. If you’re a new Afterpay customer, the amount you can spend will be lower than if you’ve been responsibly using Afterpay for a long time. We take the time to get to know you, and before each transaction, we assess your ability to make payments on your instalment plan. Just as there are circumstances which may lower the amount you can spend (such as missing a payment), consistent on-time payment history can increase what you can spend with Afterpay. Typically, the longer you’ve been using your account and making payments on time, the more likely the amount you can spend will increase.
Free for customers when you pay on time.
We don’t charge annual fees or interest to use Afterpay BNPL. We charge a fee to merchants for each transaction; this is the main way we make money. Once you’ve been a customer for 6 months, you can also upgrade to Afterpay Plus for $9.99 a month to use Afterpay almost anywhere. Eligibility criteria, fees and T&Cs apply.
It takes a couple of minutes to sign up.
Setting up an Afterpay account is simple. To get the best experience, download the Afterpay app or go to our website to sign up, or alternatively apply during the checkout process at participating online retailers. You must be over the age of 18 and provide some personal information, and link a valid debit or credit card#.
What happens if I miss a payment?
If you can't make a payment, you should contact us as soon as possible to discuss your options. You may be able to reschedule the payment or make a partial payment. We will charge a late fee if you miss a payment (see FAQ below for late fees information). But first, we will do everything we can to help you avoid this, including sending reminders leading up to the payment due date and an alert after a payment has failed. If you do miss a payment, we will pause your account and you won’t be able to buy anything else with us until your payments are up to date. You may notice your spending limit decreases too; this is because our system takes into account a range of different factors, including late payments, in deciding spending limits. If you do find yourself in financial difficulty, we have a dedicated team that can design a program specific to your circumstances to help you get back on track. Our team is here to support you if you are unexpectedly faced with a change in your financial situation. Ultimately, all steps we take are to help you spend responsibly with Afterpay.
How much are the late fees?
Total late fees are capped at 25% of the order price, and will never exceed $68 per order, regardless of the order amount.
- For orders $40 and over: each time a payment is late, an initial fee of $10 will be charged. A further fee of up to $7 will be charged if the payment remains unpaid seven days after the due date. For example: A $60 order with four $15 instalments will incur an initial $10 late fee, and a further $5 if the payment remains unpaid seven days after the due date. In this case, the further fee of $7 is reduced because total late fees are capped at 25% of the order price, $15.
- For orders under $40: the maximum possible late fee is $10 and will only be charged once. For example: A $20 order with four $5 instalments will only ever incur a one-off $5 late fee.
We also pause your account until the balance is paid and you're back on track. We’re committed to doing everything we can to help you not miss a payment. We’ve designed Afterpay to be completely different to traditional credit products that charge interest, so that our customers are never in a situation of high compounding interest and revolving debt.
Total late fees are capped at 25% of the order price, and will never exceed $68 per order, regardless of the order amount.
- For orders $40 and over: each time a payment is late, an initial fee of $10 will be charged. A further fee of up to $7 will be charged if the payment remains unpaid seven days after the due date. For example: A $60 order with four $15 instalments will incur an initial $10 late fee, and a further $5 if the payment remains unpaid seven days after the due date. In this case, the further fee of $7 is reduced because total late fees are capped at 25% of the order price, $15.
- For orders under $40: the maximum possible late fee is $10 and will only be charged once. For example: A $20 order with four $5 instalments will only ever incur a one-off $5 late fee.
We also pause your account until the balance is paid and you're back on track. We’re committed to doing everything we can to help you not miss a payment. We’ve designed Afterpay to be completely different to traditional credit products that charge interest, so that our customers are never in a situation of high compounding interest and revolving debt.
How does Afterpay make money?
The simple answer is that Afterpay charges a fee to merchants for each transaction; this is the main way we make money.Monthly fees apply to Afterpay Plus subscribers.
The simple answer is that Afterpay charges a fee to merchants for each transaction; this is the main way we make money. We have been purposefully designed to be free to consumers who pay on time. And unlike traditional credit providers, those are our best customers.
*Credit & Charge Card balances - Dec 2023 RBA | Active Credit Cards - Dec ‘23 RBA.
^Afterpay AU balances as at Dec 2023.
Afterpay figures: Afterpay internal data Q4 2023
#Eligibility criteria, capped late fees and T&Cs apply. Please see afterpay.com for full terms.
