The country’s largest buy it now company (BNPL) is looking to expand its offering to something more like a short-term loan.
Money by Afterpay, BNPL’s personal finance app slated to launch around November, will offer spot customers $ 200 per week as part of its latest product showcase.
Called “Retro,” the feature will allow customers to retrospectively transform an existing outright purchase into a buy-it-now and pay-out transaction, whether or not the merchant accepts Afterpay.
In practice, this means that Afterpay will effectively return customers up to $ 200 at a time in cash, which they will then reimburse in four installments.
Much like its other BNPL purchases, the feature is free if refunds are made on time, with the first not due for two weeks. Late fees are always charged and functionality always counts towards a customer’s spending limit.
It is also subject to certain additional requirements. On the one hand, qualifying transactions must be made on the Money debit card and must be retrospectively converted to BNPL debt within 72 hours.
Afterpay – which has been criticized for encouraging young people to take on debt – touts Money as a “money management” tool and says Retro was one of its features most requested by customers.
“As we continue to develop the Money experience, we are creating a platform for customers to change the way they think about their money,” said Lee Hatton, executive vice president of new platforms.
“Customers can forgo payday advance applications or overdraft facilities in favor of a single, fee-free solution. “
Certainly, there is no shortage of companies like this trying to reframe payday loans and payday advances for a digital generation, and in the midst of a BNPL boom.
Yet while Afterpay’s offer doesn’t hit customers with the same type of fees, which are sometimes exorbitant, it is also not subject to the same type of credit restrictions that protect users of credit products. more traditional. This is despite piggybacking money on Westpac’s banking infrastructure.
Instead, he found himself largely pioneering the no man’s land between traditional credit and predatory lending, and given the leeway to do so.
Money by Afterpay seems poised to assert that first-come advantage and dive even deeper into uncharted territory.
As he clashes with big tech companies, big banks, and a slew of smaller direct competitors, he might be grateful for a small open space.