BNPL companies

Buy now, pay later (BNPL) services have become increasingly popular in Australia in recent years.

There are now over 6 million users of these services, and the number is growing rapidly.

However, there are concerns that these schemes may not be adequately regulated, and that borrowers may not be fully protected from the risks associated with taking out a loan.

Here are three reasons why the government is right to be wary of buy now, pay later services:

1. Inferior Consumer Protections

When compared to other credit products, BNPL schemes offer inferior consumer protections. For example, many schemes do not require a credit check before approving a loan, which could lead to borrowers taking on more debt than they can afford to repay. Additionally, many schemes do not have clear guidelines about late fees or other penalties, which could leave borrowers with unexpected costs.

2. Potential for Harmful Debt spirals

The Australian Securities and Investments Commission recently reported that one in four BNPL users have missed a payment in the last 12 months. This is concerning because late payments can trigger a debt spiral, where the borrower takes on more debt to cover the cost of the original loan plus interest and fees. This can quickly become unmanageable, leading to financial hardship.

3. Lack of Regulation

Unlike other credit products, BNPL schemes are not currently regulated by the Australian Securities and Investments Commission (ASIC). This means that there are no guidelines in place to protect consumers from harmful practices. ASIC has expressed concerns about this lack of regulation and has called for greater scrutiny of these schemes.

With more and more Australians falling into debt, the government is taking a closer look at BNPL schemes.

The Regulating Buy Now, Pay Later in Australia consultation paper highlights a number of potential risks associated with the use of BNPL services which the Treasury is seeking feedback on.
If you are considering using a BNPL service, it is important that you are aware of these risks so that you can make an informed decision about whether the service is right for you.

Some of the risks associated with buy now, pay later schemes include:

They can tempt you to overspend: When you know that you don’t have to pay for something immediately, it’s easy to convince yourself that you can afford it. This can lead to impulse purchases that you may not be able to afford when the bill comes due. This can leave you with financial stress and debt that is difficult to repay.

You may end up paying more in fees: Many BNPL schemes come with high missed-payment fees. This means that if you’re not able to pay off your purchase in full when the bill comes due, you could end up paying significantly more than the original purchase price. This could leave you in a cycle of debt if you cannot afford to make the minimum repayments on your account. In addition, missed payments may be recorded on your credit report which could damage your credit score.

They can damage your credit score: If you miss a payment or make a late payment on BNPL scheme, it will likely show up on your credit report. Additionally, opening multiple BNPL accounts can also have a negative impact on your credit score as it may appear that you are relying too heavily on debt to finance your purchases. This can damage your credit score and make it more difficult to borrow money in the future.

You may be tempted to use them for larger purchases: While BNPL schemes are often advertised as being ideal for small purchases, you may be tempted to use them for larger items. This can put you in a difficult financial situation if you’re not able to make the payments when they’re due.

You may have difficulty cancelling the service: Once you’ve signed up for a BNPL scheme, you may find it difficult to cancel the service. This could result in additional fees or charges being applied to your account.

What’s next for Buy Now, Pay Later services if they’re held to a higher standard?

The government’s announcement of a review into the BNPL industry is likely to result in greater regulation of these services. This could mean that fees and charges are capped or that stricter eligibility criteria are put in place for borrowers.

Increasing regulations could lead to higher fees for consumers.
If the government increase regulation on BNPL services, one likely outcome is that fees for consumers will go up. This is because BNPL providers will need to find ways to offset the costs of complying with new regulations. For example, if regulators impose a cap on late fees, BNPL providers may try to make up for it by raising annual fees. This would make BNPL less attractive for consumers, who are already facing high levels of debt and financial stress.

BNPL providers may need to change their business models to stay afloat.
Another result of increased regulation could be that BNPL providers will need to change their business models in order to stay afloat. This could mean introducing new fees, such as an annual fee or service charge, or changing the way interest is calculated on outstanding balances. It could also mean partnering with banks or other financial institutions in order to access cheaper funding sources. Whatever changes they make, it’s likely that they will be passed on to consumers in the form of higher prices.

Some BNPL providers may exit the market altogether.
Finally, it’s possible that some BNPL providers will exit the market altogether if regulations become too onerous. This would reduce competition and leave fewer options for consumers who are looking for alternative financing products. It’s also possible that we will see consolidation in the industry, with larger players acquiring smaller ones in order to survive.

Battling BNPL Debt? Here Are some Tips to Help You Get Back on Track

If you’re like many Australians, you may have taken advantage of BNPL services to help you manage your finances. While these services can be helpful in the short term, they can also become a problem if you’re not careful. If you’re struggling with BNPL debt, there are several things you can do to get back on track.

Understand Your Options: One of the first things you need to do if you’re struggling with BNPL debt is to understand your options. Do you have enough money in your savings account to pay off the debt in full? If not, could you afford to make larger monthly repayments in order to pay off the debt sooner? Would consolidating your debt into a personal loan with a lower interest rate help you save money in the long run? There’s no one-size-fits-all solution when it comes to dealing with debt, so it’s important to understand all of your options before making a decision.

Talk to your BNPL provider: Your first step should be to reach out to your BNPL provider and explain your situation. Many providers are willing to work with customers who are struggling to make their payments. They may be able to offer you a hardship payment plan or another type of assistance.

Create a Budget: If you’re struggling to make ends meet, it’s time to create a budget. Start by tracking all of your income and expenses for one month. This will give you a good idea of where your money is going and where you could potentially cut back. Once you’ve created your budget, stick to it as closely as possible. This may require making some lifestyle changes, but it will be worth it in the long run.

Prioritise your debts: Once you’ve created a budget, you can start prioritising your debts. Make sure you keep up with any essential bills, such as rent or mortgage payments, and put any extra money towards paying off your BNPL debt.

Seek professional help: If you’re feeling overwhelmed by debt, it may be time to seek professional help from a financial counsellor or planner. They can provide guidance and support as you work towards getting back on track financially.

The future of Buy Now, Pay Later services in Australia is uncertain, but one thing is clear: if the government increases regulation on these services, it’s going to have an impact on both providers and consumers alike.
Higher fees, changes to business models, and even exit from the market altogether are all possible outcomes of increased regulation.

So what does this mean for you?

If you’re thinking about using a BNPL service, it’s important to do your research and compare different providers before you commit to anything – because the landscape is likely to change in the coming months and years ahead.

Reverse Mortgage Sticky Notes Sun

How does a Reverse Mortgage work in Australia?

If you’re over the age of 60 and own your home in Australia, you might have heard about using a reverse mortgage to borrow money using the equity you’ve built up over the years.

With house prices rising at a much faster rate than income for a number of decades, three times the amount of people are carrying mortgages and other debt into retirement.

This is bad news for older Australians.

Reverse mortgages can be a useful tool to help you stay in your home, but there are also a number of risks involved. Make sure you understand all the pros and cons before making a decision.

In this blog post, we’ll cover the basics on what you need to know about reverse mortgages in Australia, including how they work, the benefits and drawbacks, and whether or not a reverse mortgage is right for you. Keep reading to learn more!

How does a reverse mortgage work?

Many retirees who own a home that has soared in value find they are asset rich but income poor. 

Unlike a traditional mortgage, a reverse mortgage is a type of equity release product (ERP) that allows Australians over 60 to borrow money by using the equity in their home as security for the loan. With a reverse mortgage, you can choose to receive the funds as either a lump sum, a regular income stream, a line of credit, or as a combination of any of these options.

Because the loan doesn’t need to be repaid until all borrowers on the loan have either died, sold the house or moved into aged care, a reverse mortgage compounds the interest charged. This means the balance of the loan will continue to increase as the interest builds up.

Reverse mortgages are complex financial products

If you’re considering a reverse mortgage, make sure to speak to a financial advisor to see if it’s the right solution for you. While a reverse mortgage may cover your immediate expenses, you need to be aware of the long-term risks of the loan. Many people who take out reverse mortgages aren’t aware of those long-term risks.

According to regulator ASIC

“Borrowers had a poor understanding of the risks and future costs of their loan, and generally failed to consider how their loan could impact their ability to afford their possible future needs.”

Before taking out a reverse mortgage, it is important to understand the impact it could have on your financial future and your retirement.

 Moneysmart warns a reverse mortgage can impact your eligibility for the Age Pension, your capacity to afford aged care, your ability to pay for future expenses, the money you leave to loved ones when you pass away, and whether or not someone who lives with you can keep staying in your home when you move out or die.

There are a few things to consider before taking out a reverse mortgage.


If you’re considering a reverse mortgage, make sure you understand all of the risks involved. If you or someone you know is considering a reverse mortgage, we strongly urge you to seek professional financial advice first.

Want to know more about reverse mortgages?

ASIC’s MoneySmart website is a great resource to find out more about reverse mortgages, including a Reverse Mortgage Calculator to help you work out how much equity you may have in the future.

Visit the Australian Securities and Investments Commission’s free consumer website at

Money is one of those essential things that humans must manage throughout our entire lives. Many Australians today are anxious about money – stressing over their current financial situations.

From the moment we enter adulthood, we step into a world where every twist and turn – from graduation to retirement – will be directly impacted by our financial knowledge and money management skills.

Events like:

  • Career decisions
  • Buying your first home
  • Investing in property
  • Getting married
  • Having children

Finances and financial knowledge play a massive role in each of these life events. It’s not just the big events finance has a say in, though; it’s also a part of our day-to-day lives.

  • Where we eat
  • What we buy
  • Where we travel

These events conceal dozens of financial decisions that dictate many facets of our lives.

According to data released by Digital Finance Analytics, close to 75% of home loan borrowers in the northern Brisbane suburbs of Carseldine, Geebung and Zillmere are experiencing mortgage stress. This is well above the national average of 40% who lack sufficient funds to pay their bills, up from an already high 33% in February before the COVID-19 pandemic was declared.

Yet, still – managing money, mortgages and personal finances isn’t taught broadly in school. Why is that?

I can think of a few reasons… but the one that stands out the most is this – personal finance is very personal. Personal finance is also an extensive topic; covering the management of financial decisions made by a person or family-based upon their budgeting, banking, insurance, mortgage/s, investments, retirement and estate planning scenarios.

That’s a lot for teachers to add to their already huge plate of curriculum subjects. Finance – encompassing the oversight, creation and study of money, banking, credit, investments, assets and liabilities that make up our financial systems – is a subject that takes years of study and devotion to understand and master.

Since individuals, businesses and government corporations all need funding to operate, the finance fields can be broken up into 3 sub-categories; personal finance, corporate finance and public finance.

Financial planning involves analysing a financial position to formulate strategies for future needs within financial constraints. Personal finances are specific to a context. For example, individuals must save for retirement, which requires saving or investing enough money during their working lives to fund their long-term plans.

What are your long term plans and financial goals?

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