What Buy Now Pay Later methods do you use? Afterpay? Zip?

[Zaxon]

Sure the CC has a fee but instead of specific rewards the points are converted into dollar amount and paid back to the CC by the CC provider.

You're kind of alluding to it via points, but I wonder if there are CCs in Australia that pay direct cashback. In the US, 2% cashback on purchases isn't uncommon.

 

[Smurf1976]

You're kind of alluding to it via points, but I wonder if there are CCs in Australia that pay direct cashback. In the US, 2% cashback on purchases isn't uncommon.

I've had $500 worth of petrol from the bank over the past 2.5 years, easily covering the card annual fee.

Since I'd need to buy petrol anyway it's as good as cash in practice.

 

[Zaxon]

The CEO of Afterpay said yesterday in an interview, that Australians do twice as many debit card transactions as credit card. In the US, the majority of people don't even own a credit card.

I haven't independently verified his data, but if correct, that's interesting and would explain why BNPL is becoming popular.

 

[Belli]

The CEO of Afterpay said yesterday in an interview, that Australians do twice as many debit card transactions as credit card. In the US, the majority of people don't even own a credit card.

I haven't independently verified his data, but if correct, that's interesting and would explain why BNPL is becoming popular.

Maybe because the banks won't give them one as they don't meet any credit criteria?

I am indifferent to Afterpay arrangements. If others wish to use it all fine by me. If they get into difficulties as a result tough.

I simply hate debt. So much so as soon as I receive the CC statement, I schedule a payment for the first business day of the month and not wait for bank to deduct the amount from my account. The amount involved is not of a material level as far as my situation goes.

 

[Zaxon]

I am indifferent to Afterpay arrangements. If others wish to use it all fine by me. If they get into difficulties as a result tough.

The main difference between credit cards and the FinTech BNPLs, is they prevent debt snowballing. Afterpay won't allow you to make another purchase if you've missed a single payment. You need to clear up your debt before continuing. Zip pay cap their fees, so after a few months, you aren't charged any more "interest". By comparison, credit cards are more like payday loans. You can keep spending, and the interest just keeps piling up forever.

I simply hate debt.

I'm the same. I don't use debt at all.

 

[So_Cynical]

I have been thinking about the impact of the new Open Banking regime and how it would/could be leveraged into other businesses, with credit and BNPL there are
obvious benefits as the credit/debt worthiness of businesses and individuals can be assessed in far greater detail leading to much lower rates of defaults and bad debts.

 

[Zaxon]

I have been thinking about the impact of the new Open Banking regime and how it would/could be leveraged into other businesses

Can you expand on your thinking, perhaps give some examples?

 

[Zaxon]

Just for clarification, for the purpose of this thread I consider By Now Pay Later (in the FinTech sense) to be a service that:
1) Allows you to pay in installments
2) Doesn't allow permanent escalation of interest/fees

"Allows you to pay in installments" - that's why paying off your credit card in full each month wasn't counted, since it's a single payment.
"Doesn't allow permanent escalation of interest/fees" - while I did add in credit cards into the survey become someone brought it up, one of the main distinction between credit cards and Afterpay/Zip etc is that BNPL is a much safer product to use than credit cards.

 

[So_Cynical]

Can you expand on your thinking, perhaps give some examples?

Open banking equals complete access to all banking and financial data via an API, like a credit report on super steroids, thus individuals will be able to be risk assessed in far greater detail
leading to some low risk individuals getting lower cost and greater access to debt, so i imagine Afterpay etc would/could introduce a tiered system, gold, silver bronze etc based on risk.

 

[Zaxon]

Open banking equals complete access to all banking and financial data via an API, like a credit report on super steroids, thus individuals will be able to be risk assessed in far greater detail
leading to some low risk individuals getting lower cost and greater access to debt,

This reminds me of getting insurance with Youi, where they ask you twice as many questions as most other insurers. Very annoying, but their reasoning is to more accurately access your premiums. An open banking API would take that to the next step, by the sounds of it.

In a sense, we've got a version of that already. My brother walked into a new bank where he wasn't a customer, and showed them his licence. They were able to bring up info on his recent purchases, and all manner of things he was astounded by. This is due to all the information selling that goes on between companies.

I wasn't impressed when my own bank gave Facebook my phone number and contact details (and who knows what else). So now Facebook knows who I bank with. Woolworths uploaded my loyalty card details, so perhaps Facebook now knows what I've bought. Sounding like a defacto open API.

so i imagine Afterpay etc would/could introduce a tiered system, gold, silver bronze etc based on risk.

Afterpay currently don't do credit checks, which is why the Gen Z like them. They allow you in, then if you miss a single payment, they freeze future spending. Zip does do credit checks.

 

[Zaxon]

Looks like Westpac has bought up a significant percentage of Z1P.



https://www.westpac.com.au/news/mak...why-westpac-and-zip-see-powerful-partnership/

 

[Neetz]

Hmmm, other reasons for some include a few years ago Aus moved to that trashy US style of credit rating whereby exhibiting ability to pay off credit raises your credit score; and credit card transactions are supposed to be more secure.

It's good policy to have a second card in the wallet in case of problem with the debit card.

I have couple direct debits on credit card. It's good for seeing exactly what's coming out with DDs - when they're coming out of savings account it's easy to miss among the usual day to day stuff.

Yes, this is why I keep a credit card, whose Balance I pay off every fortnight when I'm paid.