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Buy now, pay later needs greater regulation, says CPA


Consumers using the platforms lack protection from laws on borrowing.

By Josh Needs4 minute read

Buy now, pay later services need to be regulated to protect vulnerable consumers, according to CPA Australia.


CPA Australia’s digital economy policy lead, Dr Jana Schmitz, said that as buy now, pay later platforms become more popular their impact will be more widely felt.

“In Australia, there are almost 6 million accounts across a variety of buy now pay later platforms, and users made an average of 16.6 transactions at an average value of $151 last year,” said Dr Schmitz.

“And in the financial year of 2021 in Australia, buy now pay later services contributed a whopping $14.3 billion to the GDP.”

This prevalence and growth of the industry has led to CPA Australia to call for stricter regulations of the buy now, pay later industry to protect consumers.

General manager media and content at CPA Australia, Dr Jane Rennie, said that the lack of regulation and ease of apps had led to more people putting themselves at risk. 

“Buy now pay later services are increasingly used by younger generations and households struggling with the rising cost of living,” said Dr Rennie.

“Gen Z is a natural target because they spend a large amount of time on social media and are comfortable shopping online.

“Some people are using them to pay for essentials, such as food, which is very concerning.”

Dr Rennie also said that although they could loan amounts up to $30,000, laws on borrowing did not apply to the platforms.

“Some of these services allow consumers to spend large amounts, even up to $30,000,” she said. “Despite the high sums shoppers can use, buy now pay later for, these platforms are currently exempt from laws designed to protect borrowers.

“This increases the likelihood of consumer harm.”

CPA Australia polled over 1,000 individuals and found that 81 per cent were supportive of regulating the industry as credit providers. 

“CPA Australia wants buy now pay later services to comply with credit rules that protect borrowers, but we don’t want to see these platforms regulated away,” said Dr Rennie.

“There needs to be thoughtful regulation that enables vibrant competition in the payment space but also adequately protects consumers.

“We want providers to make sufficient and appropriate checks about whether consumers can afford to repay loans, without proper regulation there are risks to consumers.”

Dr Rennie said that while stronger regulations of the industry would be a positive step, education would be the best prevention.

“Ultimately, financial literacy is the best protection against risky financial decisions,” said Dr Rennie.

“We need to ensure younger generations have the appropriate financial literacy to make informed decisions.”

Buy now, pay later needs greater regulation, says CPA
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Josh Needs

Josh Needs


Josh Needs is a journalist at Accountants Daily and SMSF Adviser, which are the leading sources of news, strategy, and educational content for professionals in the accounting and SMSF sectors.

Josh studied journalism at the University of NSW and previously wrote news, feature articles and video reviews for Unsealed 4x4, a specialist offroad motoring website. Since joining the Momentum Media Team in 2022, Josh has written for Accountants Daily and SMSF Adviser.

You can email Josh on: This email address is being protected from spambots. You need JavaScript enabled to view it.

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