Australia’s ballooning purchase now, pay later system is ready to be regulated by the federal authorities, over fears it poses a rising hazard to shoppers.
Under modifications to be introduced by Financial Services Minister Stephen Jones in a speech on Monday, purchase now, pay later will quickly be handled as a credit score product.
After a session course of, the federal authorities has determined that suppliers will want a credit score licence, have hardship necessities and minimal requirements of conduct to raised product the tens of millions of Australians now utilizing the merchandise.
With seven million energetic accounts within the 2021-22 monetary yr, totalling greater than $16bn in transactions – 37 per cent greater than the earlier yr, Mr Jones mentioned more durable regulation was wanted.
He mentioned it “looks like credit, it acts like credit, it carries the risk of credit”.
Treasurer Jim Chalmers mentioned purchase now, pay later had a job to play within the financial system, but it surely had turn out to be too common with none checks and balances.
“They’ve got a role to play, but we need to make sure that we do manage the risks,” he informed ABC News.
“And the best way to do that is to legislate – to regulate it as a credit product so that we can manage some of the risks around hardship and marketing.
“We think that they do have a legitimate role to play in the system. They are very popular, but we need to make sure that we manage them appropriately because the harsher impacts of these fall disproportionately on some elements of our society, and we don’t want that.”
Women, First Nations communities and folks on low earnings are disproportionately affected by the ailing results of purchase now, pay later; notably the flexibility to function a number of accounts concurrently.
Source: www.perthnow.com.au
