Next to e-scooters, they’re the biggest thing in shopping in the last few years —especially with younger buyers. Buy Now Pay Later (BNPL) services are relatively new to the Australian market, enabling you to buy a product or service immediately but pay for it over a specific period.
Sounds like a credit card?
Unlike a credit card, the benefit here is that you won’t incur any interest for your purchases. It’s a convenient, flexible, easy to set-up alternative.
BNPL offers a lot of benefits, so it’s no surprise that there has been a sharp increase in the number of Australians choosing to opt-in over recent years.
The trap?
There’s been significant discussion around the topic of responsible lending and whether BNPL providers require greater regulation. As you’d expect, many argue that their self-regulation code of conduct is sufficient.
Unfortunately, not all BNPL providers are responsible lenders.
So, what is responsible lending?
It’s a concept designed to ensure that providers do not encourage consumers into entering credit arrangements that are not compatible with their current financial situation.
Irresponsible lending is – you guessed it! – the opposite of that. It happens when providers have not made reasonable enquiries about a consumer’s financial situation, and people are provided with loans they cannot repay.
Booooo!
BNPL companies can offer their services to consumers who cannot afford to repay because — according to the Australian Securities & Investments Commission (ASIC) — they are not liable to responsible lending obligations and are, therefore, not required to consider the financial situations of their customers.
At Gimmie, we believe responsible lending is a key element in our long-term growth and prosperity. Gimmie is a responsible credit provider and operates under an Australian Credit Licence. It is a legal requirement that we obtain and verify your bank statements to confirm the financial information that you’ve given us.
So, you can happily say “Gimmie” now, and pay your purchase off over one or two years.
Got questions? Head over to our website to find out more!
