Buy-Now, Pay-Later

Days left

Submissions due: 16 December 2021, 5pm

The Government is seeking feedback on the relative benefits and costs (including financial hardship) of Buy-Now, Pay-Later.

About the consultation

The Government wants to know how Buy-Now, Pay-Later (BNPL) could trigger financial hardship, and also what the benefits are from BNPL, so that options to address the triggers of financial hardship are proportionate and fit for purpose. 

Your feedback will help the Government understand and address potential triggers of financial hardship, and achieve an effective BNPL sector - one where addressing the risks of financial hardship is balanced against the benefits of BNPL.

What we are seeking feedback on

We want to hear from consumers, those who represent consumers, business who accept BNPL, BNPL providers and any other interested parties.

An online survey is also available where people can share their experiences, both positive and negative, from using BNPL.

BNPL online survey(external link)

Below are the documents to read and the template for you to complete if you would like to share your views with us.

What is Buy-Now, Pay-Later

BNPL is a relatively new, innovative and fast growing credit alternative in New Zealand, and is particularly popular for online purchases. Afterpay, Humm, Zip, Laybuy, Genoapay (Latitude), Openpay and, Klarna are examples of BNPL in New Zealand. By using BNPL, people can get access to goods or services now but pay for them later in a series of instalments. 

Concerns of financial hardship

Financial mentoring organisations who work to help New Zealanders in financial difficulty have made MBIE aware that BNPL could be creating financial hardship for some consumers.

While BNPL products have features of consumer credit contracts, they fall outside the strict definition in the CCCFA (section 11) because they do not charge interest, fees or take a security interest over goods. They are subject to the Fair Trading Act 1986, and some BNPL providers offer other products which are CCCFA regulated.

CCCFA (section 11)(external link) — New Zealand Legislation website

During the MBIE 2018 Review of Consumer Credit, there was found to be little evidence of harm caused by BNPL products at that time and therefore they were not brought within the scope of the CCCFA. Through that review the Government created a new power under the CCCFA to extend legal requirements to BNPL and other non-regulated credit products if warranted.

Review of consumer credit law

New power to extend legal requirements to BNPL and other non-regulated credit products(external link) — New Zealand Legislation website

Risks of financial hardship

  • Financial hardship can take a range of forms. This could include consumers missing or being late with payments, which adds to the debt they already face. This could also include consumers meeting their BNPL instalment/payment but not being able to afford other expenses (such as a power bill or groceries) because instalments/payments are collected automatically via debit card or credit card.
  • The risk of financial hardship is increased if the consumer uses more than 1 BNPL provider.

Benefits of BNPL

  • There are also benefits to using BNPL. BNPL can be an effective and low-cost way to spread the costs of purchases without paying interest.
  • BNPL can also be useful for businesses as it may generate additional sales.
  • In terms of economy-wide benefits, BNPL disrupts the credit market by providing consumers with a low-cost alternative to existing credit products, resulting in greater innovation and competition, and therefore better outcomes and options for consumers.

So how can the risks of financial hardship be balanced against the benefits of BNPL?

The Government’s overall objective is that the BNPL sector delivers long-term benefits to consumers through an effective BNPL sector - one where addressing the risks of financial hardship is balanced against the benefits of BNPL.

The interests of BNPL consumers should be protected, so that they are confident and informed participants in a transparent, competitive and innovative BNPL sector.

BNPL should be affordable and suitable to the needs of the consumer. A number of features that could help address the risk of financial hardship to consumers are outlined in the discussion paper.

How could these features of BNPL be achieved?

3 options have been prepared for how these features could be achieved by the BNPL sector, and the government is seeking feedback on which option is best for consumers and the sector.

  • Option 1: Status Quo – BNPL sector chooses to develop and introduce a voluntary code, which may or may not address the triggers of financial hardship identified in the discussion paper.
  • Option 2: Government establishes appropriate incentives for BNPL providers to develop an industry code which addresses the triggers of financial hardship.
  • Option 3: Apply CCCFA to regulate BNPL products.

Who do we want to hear from?

  • Consumers who use BNPL
  • Financial Mentoring Services
  • Consumer Advocacy Organisations
  • Businesses who accept BNPL as a payment option
  • BNPL providers
  • Any other interested parties

How to make a submission

Send your submission using the template:

  • as a Microsoft Word document or searchable PDF to (preferred), or
  • by mailing your submission to:

    Competition and Consumer Policy
    Building, Resources and Markets
    Ministry of Business, Innovation & Employment
    PO Box 1473
    Wellington 6140
    New Zealand

Please direct any questions that you have in relation to the submissions process to

Release of information

MBIE intends to upload copies of submissions received to this website. MBIE will consider you to have consented to uploading a copy of your submission by making a submission, unless you clearly specify otherwise in your submission.

If your submission contains any information that is confidential or you otherwise wish us not to publish, please indicate this on the front of the submission, with any confidential information clearly marked within the text.

Submissions remain subject to request under the Official Information Act 1982. Please set out clearly in the cover letter or e-mail accompanying your submission if you have any objection to the release of any information in the submission, and in particular, which parts you consider should be withheld, together with the reasons for withholding the information.

MBIE will take such objections into account and will consult with submitters when responding to requests under the Official Information Act 1982.

Private information

The Privacy Act 2020 establishes certain principles with respect to the collection, use and disclosure of information about individuals by various agencies, including MBIE.

Any personal information you supply to MBIE in the course of making a submission will only be used for the purpose of assisting in the development of policy advice in relation to this review.

Please clearly indicate in the cover letter or e-mail accompanying your submission if you do not wish your name, or any other personal information, to be included in any summary of submissions that MBIE may publish.