Afterpay, the Sydney-based ‘buy-now-pay-later’ company that launched late last year, has been a huge success servicing over 700,000 customers and is on track for 1 billion dollar payday.
Afterpay allows shoppers at more than 5000 retailers across Australia, to purchase goods and pay them off in four fortnightly repayments across an eight-week period.
It’s attractive fee-free instalments plan and zero credit checks means customers can pay a fraction of the item online and have it delivered the next day.
But according to Newscorp, Australian debt collection agency Fox Symes says there is an alarming number of Afterpay customers with new debts.
Director Deborah Southon said she was concerned Afterpay failed to do credit checks before customers signed up to the service.
“We weren’t aware of Afterpay until late last year and since there we have seen an increase with customers presenting with an Afterpay debt,’’ she said.
“Of all the customers that came to us in April and May, five per cent of those had an Afterpay debt. That’s rapid growth in under six months and it’s pretty disturbing.
“The approval process is almost spontaneous, so I can see this exploding and getting worse and worse.”
Afterpay is especially popular with young and impulsive shoppers. On the plus side, the convenience of Afterpay is great for those ‘sensible customers’ who may have that last minute special occasion and need that emergency dress but are on a budget.
Last month, Afterpay secured it’s first international deal with none other than New Zealand. Their first client: Trade Me. We predict it won’t be long before more Kiwi-businesses jump on board.