Buy now, pay later will be regulated under credit laws, but under a middle option backed by CBA and Zip, requiring “scalable” responsible lending checks. ausbiz
Buy now, pay later will be regulated under credit laws and companies in the sector will have to determine that products are suitable for their users under responsible lending obligations, Financial Services Minister Stephen Jones will say in a speech on Monday.
“Not all buy now, pay later products are the same: some are offering $15,000 to $20,000 loans for niche products like solar, which is very different to $150 for a pair of jeans,” Mr Jones said ahead of a speech to the Responsible Lending and Borrowing Summit in Sydney where he will announce the plan.
The new laws will impose fee caps on charges for missed payments, and require new warnings and disclosures. They will also make providers comply with “design and distribution obligations” administered by the Australian Securities and Investments Commission that ensure products are suitable for the target market they are being offered to.
“BNPL is a credit product and is in competition with other forms of credit. I am a fan of the innovation and competition it has brought, but they have to meet a set of standards imposed on other credit products,” Mr Jones said.
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