The future of buy now pay later operators like Afterpay have been dealt a blow today as the Reserve Bank argued retailers should be able to pass on their fees to customers.
Business Editor Ross Greenwood says the use of buy now pay later services for retailers are “relatively expensive” compared to traditional forms of payment.
“Generally, retailers use it because they get more customers this way because customers like the convenience of being able to buy now and pay later,” he told Sky News host Chris Kenny.
“The fees to retailers right now from Afterpay are between three and seven per cent and from Zip it’s between two and six percent, compare that with a credit card which is 0.9 per cent more expensive.”
Mr Greenwood said using a debit card is “the cheapest form of payment” to a retailer as it only attracts a fee of 0.5 per cent.
He said “part of the conditions” for buy now pay later operators has been a ban on passing on the fee from retailer to customer but the Reserve Bank has overruled this condition.
“Retailers will love it, the buy now pay later sector, however, won’t like it because they’ll recognise by doing this, it will highlight the cost of the buy now pay later service and consumers will ultimately start to pay in different ways,” he said.
