Buy Now Pay Later Companies in Australia: provider comparisons, how to sign up and tips to manage a BNPL account

Logos of buy now pay later providers in Australia

On this page:

  • What is Buy Now Pay Later?
  • The Buy Now Pay Later companies in Australia
  • The pros and cons of Buy Now Pay Later
  • What kind of fees do Buy Now Pay Later companies charge
  • What information do I need to provide to set up a Buy Now Pay Later account?
  • Can I trust Buy Now Pay Later?
  • Tips for using Buy Now Pay Later responsibly 
  • What happens if I get into financial trouble with Buy Now Pay Later?

Buy Now Pay Later (BNPL) has become a popular payment method for Australians in recent years. In fact, recent Mozo research suggests that a large chunk of Aussie BNPL users (42%) already have at least one account that they've been using for three or more years.

There are over 10 providers in Australia currently offering BNPL services. If used responsibly BNPL can be a helpful budgeting tool, but like any new money-related innovation, it’s important to understand all of the ins and outs before you sign up. 

What is Buy Now Pay Later? 

Buy Now Pay Later services allow users to purchase a product or service at a shop or online, and pay it back in interest free instalments.

Interestingly, this concept isn’t new. You might recall traditional ‘lay-by’ services, in which you pay for goods in two or three instalments, and do not receive the goods until the full price has been paid. 

The difference between Buy-now-pay-later and lay-by is that customers who use BNPL services receive their items instantly and they make instalment repayments to the BNPL service provider, not the store that the goods are purchased from.

How does Buy Now Pay Later work?

When you sign up to a BNPL company and are approved, you can either link your debit or credit card to your account. From there, you will be allocated an account limit, a fixed repayment schedule for future purchases and have access to the app where you can manage and make your repayments. 

To use it at the checkout, all you need to do is select Buy Now Pay Later as your payment method. If you are shopping online, you may be redirected to your BNPL’s website to complete your purchase. And if you’re choosing to use it in-store, you may need to make your purchase via a purchase code on the company’s app. 

Your repayments are then automatically deducted from your nominated bank account or card, though many BNPL companies also give you the option to make your repayments earlier.

BNPL-guide-01

Buy Now, Pay Later providers in Australia

Buy Now Pay Later
  • Flexible account options to match your spending needs
  • Weekly, fortnightly or monthly payment options
  • $7.95 monthly account fee for Zip Pay and $6 monthly account fee for Zip Money (waived if you pay your balance in full each month)

BNPL giant Zip* has more than 2 million customers across Australia and New Zealand and is available to use across thousands of retailers both in-store and online. Its Zip Pay option is available for purchases under $1,000 (with a separate Zip Money account available for spending over $1,000). You'll be able to choose between weekly, fortnightly and monthly payment options, and if you pay your closing balance in full each month Zip will waive the monthly fee.

Buy Now Pay Later
  • Maximum account limit of $2,000
  • No interest. Four equal fortnightly payments.
  • $10 late fee
Find out more

Afterpay is one of, if not the biggest Buy Now, Pay Later services in Australia, allowing users to make purchases at thousands of stores online and offline nationally. In fact, according to the AFR, in 2020 the platform was gaining an average of 20,500 new customers a day! 

Afterpay customers can split up a single purchase into four interest-free fortnightly instalments. Easy-to-use app allows customers to manage their orders, get repayment notifications and stay up-to-date on retailers available via the platform.

Buy Now Pay Later
  • 'Ghost card' maximum of $1000
  • Available to use at any store
  • Rewards club and price drop tracking
Find out more

Klarna originated in Sweden 15 years ago and was introduced to Aussie shoppers through the help of CommBank. A standout feature of Klarna is that customers can pay through the app at any store, via its ‘ghost card’ feature, which has a maximum limit of $1000. Purchases split into 4 payments, paid every two weeks. The app also gives you access to exclusive deals and earn rewards plus price tracking means there could be times you don’t have to pay full price.

Buy Now Pay Later
  • Make purchases up to $20,000
  • Terms of up to 36 months interest free
  • Fortnightly or monthly instalment options
Find out more

Payright is a BNPL loan option which allows you to turn one big payment of up to $20,000 into smaller interest free installments. Because of this, Payright will conduct a credit check to ensure your repayment capacity. You can choose between fortnightly or monthly installments with a payback term of up to 36 months. There are some fees to consider so depending on the size of the purchase you might have to pay account establishment fee (maximum $89). There is also a $3.50 monthly account and a $2.95 payment processing fee which is added to each payment.

Buy Now Pay Later
  • 0% interest payment plan for solar or home improvement projects
  • Up to $30,000 for homeowners
  • Fortnightly repayments from 6 - 60 months
Find out more

A 0% interest payment plan available to Australian homeowners for home improvement projects like solar or battery installation, or kitchen and bathroom renos. No early repayment or payout fees. Included in your fortnightly repayments is a $1.50 per week account keeping fee.

Credit cards with 0% interest instalment plans

Similar to the way that buy now pay later providers allow you to pay off purchases in instalments, a number of banks and financial institutions in Australia offer credit cards with 0% interest instalment options. Here’s a look at some of these:

NAB StraightUp Card
  • Innovation award winner - 2020 Mozo Experts Choice Credit Card Awards^
  • 0% interest on purchases
  • Max credit limit $3000

What you need to know: With the Straight Up card from NAB you can make purchases wherever Visa is accepted and you won’t pay any interest. There are three credit limits ($1000, $2000 and $3000) and each one comes with a fixed monthly fee ($10, $15 and $20) and minimum monthly repayment. If your balance is $0 during the whole statement period the monthly fee will be waived. There are no foreign transaction fees giving you freedom to shop internationally fee free and no late payment fees. You can apply online and get a response within 60 seconds.

American Express Low Rate Credit Card
  • Plan IT Instalment option
  • Up to 55 days interest free
  • No annual fee

What you need to know: With the AMEX low rate card, you’ll get up to 55 days interest free if you pay your balance off in full each month. The standard purchase rate is a low 8.99% and cardholders have the option to use Plan it, which gives you the flexibility to pay off your balance in monthly instalments with 0% p.a. interest at a fixed monthly fee. There is a $30 late payment fee to consider and a 3% foreign exchange margin. New card members could receive $100 back when they apply online by 27 October 2021, are approved and spend $1,000 on their new Card by 31 December 2021 (Terms and conditions apply). You’ll need to be over 18 years of age and earning $50,000 or more to be eligible.

humm90 Mastercard
  • Up to 110 day interest free on your spending
  • Additional 9, 12 or 15 month installment plan option for purchases over $250
  • Up to 10% cashback via brand crush promos

What you need to know: The humm90 card has several ways that you can skip interest payments. Firstly, if you pay off your balance in full each month you’ll get up to 110 days interest free on eligible purchases. Plus for eligible purchases over $250 there is the option to convert these to an interest free instalment plan over 9, 12 or 15 months, but you will pay a fee which is a percentage of the purchase amount. Be sure to set up automatic repayments with this card because if you fail to make the required repayments for any option, the outstanding balance will revert to the purchase rate, which is currently 23.99%. Other benefits include no foreign transaction fees on overseas purchases, and complimentary insurances such as price and purchase protection and brand crush cashback promotions where you can receive up to 10% cashback (T&Cs apply for all benefits). The card has a $99 annual fee and $35 late payment fee.

More Buy Now Pay Later options

  • Openpay: Equal weekly or fortnightly payments. Sign up via the App, in-store or at the online checkout. Plans range from 1 month to 24 months.  You can shop with partners and track payments via the app. You won't be charged interest but some plans will include a plan management fee and an establishment fee may also apply.
  • Humm: two Humm account options - Small Things account has an account limit of $2000 spread over 5 or 10 installments, while a Big Things account can go up to $30,000 over 6 to 60 months. Some fees to consider such as an $8 monthly fee when purchases are spread out over 10 or more payments and a
    $6 late payment fee. The Big Things account also has an account  establishment fee which ranges from $35-$60 depending on the purchase.
  • Bundll: referred to as “the debit card on steroids” Bundll users can use the service at any store that accepts Mastercard to Buy now, Pay Later. You get 2 weeks to repay, interest-free with every tap of your bundll digital Mastercard. You can also Snooze your repayments for an extra 2 weeks or roll them up into a superbundll, which allows you to pay in 6 fortnightly instalments. If you miss a payment there is a $10 late payment fee (after a 24 hour grace period) and your account will be suspended.
  • Latitude Pay: 10 weekly payments and pay no interest. Maximum account limit of $1000 and flexibility to choose a payment date that suits you. Miss a payment and you’ll need to pay a $10
    late payment fee.
  • LayBuy: Not to be confused with the old school lay-by, with BNPL LayBuy you can own what you want now and split up the payments across six weeks, interest-free. There’s a $10 late fee if a scheduled payment is declined. Shop online or instore.
  • Pay It Later: Shop like normal at your usual store and at the checkout select pay it later then set up an account and make your first payment. Pay purchases off in four instalments and similar to other BNPL platforms if you miss a payment a $10 late fee applies.

What are the pros and cons of Buy Now, Pay Later?

BNPL-guide-02

BNPL sounds like a handy payment method to have in your back pocket, but you might be wondering if there’s more to this service than meets the eye. 


Possibly the biggest pro of Buy Now, Pay Later is that unlike a credit card, you won’t incur any interest for your purchases. It’s also pretty easy to sign up and be approved for, as most platforms don’t require a credit check when you sign up, making it widely accessible for Australians over the age of 18. 


It’s easy to manage as well, with many BNPLs featuring a smartphone app where users can manage their repayments, view upcoming repayments and purchase items. Some BNPLs, including Klarna, also reward users with discounts and coupons to various retailers


But like any kind of credit or have now, pay later option, there is the potential to get yourself into debt or financial difficulty. It’s also worth mentioning that if you miss an instalment payment, most providers will charge you a late payment fee. The amount will depend on the BNPL provider but is usually $10 on top of your installment. 


When you sign up for a BNPL account, you will need to link a bank or credit card account for payments. This means that it is important that you keep on top of the instalment due dates and always have money in your account to make your payments. If not, you could be hit with a late payment fee by the BNPL provider as well as a potential overdrawn account fee from your bank. 

How are Aussies using Buy Now, Pay Later?

There are many ways to use BNPL, whether you opt for online or in-store. According to Mozo's research, customers aren't only using these types of platforms to buy things like clothing and shoes. Instead, 65% of BNPL users are buying big necessities like a fridge, heater or new bed. This is in front of luxury items (57%) like designer clothing, jewellery and car accessories and essential items (28%) like food. 

For more of the latest stats and BNPL trends check out Mozo's 2021 Buy Now Pay Later Report

What is Afterpay?

Afterpay is one of the biggest Buy Now Pay Later companies in Australia and was launched in 2014. According to Afterpay’s most recent half-year financial results, as of February 2020, the company has over 3 million active users in Australia alone. 

Because Afterpay is one of the largest BNPL companies, it is an accepted payment method at almost all online and in-store retailers.

How does Afterpay make money?

Just in case you weren’t aware, Afterpay does not charge its customers any ongoing or application fees to use the service. Instead, the BNPL generates profit in two ways: the fees it charges participating retailers and the late payment fees it charges customers. 

More specifically, an ASIC BNPL market update report revealed that 80% of Afterpay’s revenue during the 2018/19 financial year came from merchant fees, while the remaining 20% was from late payment fees.

Is Zip Pay free?

No, Zip Pay is not free to use; however, it is the more budget-friendly alternative to Zip Money. Although Zip Pay never charges interest for purchases, customers are charged a $7.95 monthly account fee. But if you manage to keep your balance cleared, the fee is waived.

Is Zip Pay safe?

Yes, Zip and its products are subject to many laws and regulations, like the Privacy Act 1988 (Cth), which protects individuals’ privacy and regulates Australian organisations with an annual turnover of more than $3 million. 

In terms of protecting your personal information stores within the app, like other BNPL companies, Zip Pay conducts regular security maintenance checks within the app or on its website to make sure that its security is performing correctly.

Does Buy Now Pay Later impact your credit score?

Typically? No. But it can if things get out of hand. 

If you choose to link your credit card to your account and miss your monthly repayment, you could start to accrue interest on your BNPL spending. And if this becomes an unfortunate habit on your behalf, it could negatively impact your credit score.


Additionally, some BNPLs have the right to report any negative actions on your account, such as missed payments to credit agencies, which can leave a mark on your credit history.

Can I use Buy Now Pay Later services anywhere? 

Buy Now, Pay Later is widely available in Australia and can be used either in store or online, however it’s worth noting that not all retailers accept BNPL as a form of payment. And for the retailers that do, they might not allow all BNPL platforms to be used. For instance, at online store The Iconic, only Afterpay is permitted. 

However, some BNPL companies, like Klarna, have the infrastructure that gives customers the ability to shop at any store.

Most stores will have the BNPL options listed at either the online checkout or at the register.

What kinds of fees and charges could I have to pay with Buy Now, Pay Later?

This will depend on the type of BNPL service you sign up for. While you won’t be charged interest some of the most common fees include:

  • Monthly fees: Many BNPL services who cater to larger size purchases may charge a monthly account fee, which can range from $8 - $10 a month. 
  • Late payment fees: This is a fee you will be charged if you miss a payment. It’s important to keep in mind that some BNPL services can charge more than one late payment fee if you continue to default on a payment. 
  • Establishment fees: In some cases, you could be charged a one-off establishment fee to set up your account. 
  • Service fees: For bigger types of spending, you may be subjected to pay a service fee, which is the cost to set up your purchase.

What information do I need to provide to set up a BNPL account?

Every Buy Now, Pay Later platform will have their own requirements when a customer wants to set up an account, but we’ve jotted down the most common information you might be asked to provide:

  • Prove you are over the age of 18 through a valid form of ID
  • The details of your debit or credit card you want to link your account with 
  • Your email address or phone number 
  • Your billing information and address

Which is the best Buy Now Pay Later company in Australia?

This is up to you to decide, as the ‘best’ option for you will depend on how you intend to use your BNPL account.

In saying that, Mozo's expert judges weighed up 14 buy now pay later services to find the best options as part of the 2021 Mozo Experts Choice Buy Now Pay Later Awards. They determined the winners in terms of fees, flexibility and availability, across three different categories: Small Purchases, Major Purchases & Specialist Services. 

Here's which BNPL providers came out on top: 

Small PurchasesKlarna
Major Purchaseshumm 'Big Things'
Special ServiceBrighte

When choosing which provider suits you, it’s important to ask yourself things like whether you’ll be using Buy Now Pay Later for online shopping or larger purchases only. This is because some BNPL companies can charge fees based on the size of your purchase or may ask you to pay an ongoing monthly service fee. 

You might also want to select a BNPL option based on their instalment schedule because it can guarantee you’ll make your repayments on time. For instance, fortnightly instalments might suit you best if you receive your paycheck every two weeks. 

If you’d like to find out which Buy Now Pay Later company could be the best pick for you, check out our handy BNPL breakdown.

How do I choose the best Buy Now Pay Later company?

To answer this question, you will need to ask yourself how you intend to use it. Are you only looking to use it once or twice a month? Will it be used for smaller or larger purchases? Are you comfortable with weekly or fortnightly payments? What kind of account limit do you need? 

No BNPL company is the same, so it’s up to you to do your research and compare your options to find the service that’s right for you.

Which Buy Now Pay Later is the best for online shopping?

Since BNPL is a digital product, it’s hard to find a service that doesn’t mesh well with online shopping. One thing to keep in mind though, is that online retailers may not accept all BNPL services, so be sure to make sure your BNPL payment will be accepted before you checkout.

Which BNPL is best for expensive items?

One of the great things about having a range of BNPL companies in Australia is that there is an option for every kind of shopper. If you are planning to use BNPL for larger types of spending, here are three companies to look at:

Humm

  • Account limit of between $2,000 to $30,000
  • Number of instalments depends on the size of the purchase 
  • $8 monthly fee for purchases that require more than ten instalments

Openpay

  • Maximum account limit of $3,000 
  • Weekly or fortnightly instalments 
  • Establishment fee may be charged based on the size of your purchase

Payright

  • Maximum account limit of $10,000 
  • Establishment or service fee may be charged (depending on purchase size) 
  • Credit check performed before purchases are made

Which Buy Now Pay Later is the best for electronics?

Generally, BNPL companies have a store directory available on their website that displays every retailer that accepts the service as a payment method. These lists allow you to filter through categories, like fashion, beauty and even electronics, allowing you to determine the BNPL that may be best suited for your spending needs. 

For instance, some of the electronic retailers that accept Afterpay include:

  • Kogan
  • Bing Lee
  • Big W 
  • Godfreys

Can I trust Buy Now, Pay Later?

In January 2020, BNPL platforms were called upon to sign a ‘Code of Conduct’ issued by the Australian Finance Industry Association (AFIA), which would come into effect March 2021.

Inside the code are the minimum standards BNPL firms must practice as well as other guidelines around late payment fees, age restrictions and how to manage customers experiencing financial hardship. 

However, ASIC says that as BNPL services continue to grow, more legislation will need to be introduced. From October 2021, BNPL companies must comply with the regulator’s ‘design and distribution obligations’, which involves regularly assessing whether their products are a good fit for a customer. 

ASIC says any further regulation should then be signed off by the government or even Parliament.

Is Buy Now Pay Later safe?

Like any new digital payment method that hits the market, there are often concerns around security. Let’s start with what personal information is collected. 

Buy Now Pay Later companies like Afterpay, Zip and Humm collect things like:

  • Your contact information: might mean your name, residential or business address, phone number or email address. 
  • Your personal information: may include your date of birth, drivers license and other identifying information. 
  • Your financial information: might consist of your bank account, credit or debit card details, current income and financial status.

To keep your personal details safe and secure, BNPL companies conduct frequent software security checks. Many also protect their customers through a two-factor authentication measure, which means two different passwords are required to access the account.

Tips for using BNPL responsibly

Although the idea of never having to pay interest might sound like a shopper’s dream, Buy Now, Pay Later users still need to use the service responsibly. To help keep spending under control while using BNPL, we’ve jotted four, quick tips.

  • Only use one platform: While Aussies may be spoilt for choice when it comes to BNPL, it’s best to only use one platform. Juggling multiple payments for different platforms can be tricky to keep up with and may see you spend beyond your means. 
  • Opt for a service with minimal fees: Many shoppers choose to use BNPL to save on costs, like interest. In this case, try to opt for a platform that charges minimal or zero fees for having an account. 
  • Set reminders for upcoming payments: Although some BNPL platforms do send payment reminders to customers, it’s still worth setting up your own reminders to ensure you are not charged a late payment fee. You can do this on your phone or marking it in your calendar. 
  • Be realistic about your repayment capacity: If you are planning on having multiple BNPL purchases on your account, just be sure you have enough wiggle room in your budget to do so.

What happens if I get into financial trouble?

Financial hardship can happen to anyone and it’s important to know what to do if you get into financial trouble managing your BNPL account. 

Most BNPL platforms will have a financial hardship program, so your first step should be to get in touch with them as soon as you realise that you will not be able to make a payment. They might be able to help you to sort out a temporary solution based on your circumstance. Some options could include pausing or rescheduling repayments for an agreed time or waiving fees. 

However, if your financial problems go beyond just managing your BNPL account and you’d like more assistance around managing money, a financial counsellor can give you free, confidential advice about how you can get things back on track. More information on free financial counselling can be found at MoneySmart.

Lastly, If you're interested on the numbers around Buy Now Pay Later. Check out our Buy Now Pay Later statistics page for further information. 

*ZIP TERMS - Zip Pay: Minimum monthly repayments are required. A monthly account fee of $7.95 applies. Pay your closing balance in full each month and Zip will waive the fee. Available to approved applicants only. Terms & Conditions apply and are available on application. See your contract for further details. Zip Money: Minimum monthly repayments are required. Paying only the minimum monthly repayment amount will not pay out the purchase within the interest free period. Any balance outstanding at the expiry of the interest free period for the purchase will be charged interest at the contractual rate, currently 19.9%. A $6 monthly account fee applies. A one-off establishment fee may apply. Available to approved applicants only. Terms & Conditions apply and are available on application. See your contract for further details. Credit provided by zipMoney Payments Pty Limited (ABN 58 164 440 993, Australian Credit Licence Number 441878).

This guide was created in collaboration with Ceyda Erem

^ See information about the Mozo Experts Choice Credit Card Awards

^See information about the Mozo Experts Choice Buy Now Pay Later Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.