Afterpay interest-free payments
A way to make a purchase and pay for it later – without interest.
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You might have already seen Afterpay as a payment option in stores and online. When you buy something, you can simply select Afterpay as your payment method and have eight weeks to pay the amount back in four instalments with no interest. Costs only incur if you fail to make your repayments on time.
How does Afterpay work?
You can start shopping with Afterpay by signing up and linking an Australian Visa or Mastercard debit or credit card. All you have to do is sign up and confirm your details.
- Online. Buy online by selecting Afterpay at the checkout.
- In-store. Buy in-store at selected retailers by using your phone to visit afterpayit.com.au and entering the amount you want. You’ll get a barcode on your phone that can be scanned at the cash register.
Two weeks after you’ve made your purchase, you’ll need to pay back the first quarter of the outstanding amount, with the remaining quarters paid back every two weeks after that. Payments are processed automatically, and you’ll receive reminders before payments are due.
In order to make sure the service is free to use for everyone, the amount you can spend at any one time may be subject to approval. Purchases over $500 will require the first quarter payment at the time of purchase. All this information will be communicated to you before you’ve paid, so you can always make an informed decision.
Features of shopping with Afterpay
- No interest. It works like a no-interest loan. You have longer to pay for your chosen item with no added interest.
- No advance sign up for in-store purchases. Even if you don’t have an account, you can still walk into a selected retailer and choose Afterpay. You’ll just need to sign up later.
- Manage your account. Sign in to see your upcoming payments, orders and account information.
- Reminders. You’ll be notified ahead of time when a payment is coming up and how much it is so that you can make sure there’s no overdrawing.
- Automatic deductions. Each quarter amount is automatically deducted from your chosen card to make sure you can keep up with your repayments, even if you’re busy or you can’t get online.
- Refunds and more. You can still get a refund for purchases you’ve made with Afterpay, in line with each store’s refunds policy.
- Pay in advance. You can pay instalments ahead of time, penalty-free.
- Market-leading security. Afterpay is a PCI DSS Level 1 certified compliant service provider. This is the highest level of payment security there is, for both your card details and your personal information.
How much does Afterpay cost?
There are two costs involved with Afterpay. One of them is the cost of the item you’re buying. The other is a late fee for missed instalments.
If a deduction is unsuccessful, you will be notified and you will have a chance to log in and choose a different payment method. Failure to do so will incur a $10 late fee. If you fail to make a payment within 7 days, you'll be charged a further $7. For each Afterpay order, you can be charged a maximum of one $10 late fee per order. For any order of $40 or above, you can be charged late fees of 25% of the original order or a maximum of $68 – whichever is higher.
If you fail to make repayments, Afterpay holds the right to report it to a credit reporting bureau.
Is Afterpay safe?
Afterpay is touted as a new way to pay and different from traditional credit products, but it is important to still be careful with Afterpay. While Afterpay does not check your credit history before you apply, it still reserves the right to report defaults to credit reporting bureaus such as Experian or Equifax. You need to keep this in mind before you apply.
In terms of your information, Afterpay is a PCI DSS Level 1 certified compliant Service Provider organisation. This means that it abides by the comprehensive set of requirements to keep your data secure.
Is there a limit to how much you can spend with Afterpay?
Your limit depends on whether you have linked your Afterpay account to a debit card or credit card. If you linked your account to a debit card, then you can't have more than $500 outstanding or your next purchase won't go through. However, if you have a credit card linked to your account, then your limit is up to $1,500.
If you've linked your account to a debit card but want to access the higher limit, you can always switch your account and link it to a credit card.
Does Afterpay do a credit check?
No. You'll be automatically approved as long as you're 18 or over and have a working credit or debit card.
How to sign up for Afterpay
In order to sign up, you have to meet the following criteria:
- Be at least 18 years old and capable of entering into a legally binding contract
- Have a valid and verifiable email address and mobile number
- Have an Australian credit or debit card
Afterpay is not a store credit application. You don’t have to sign anything or fill out an application form. All you have to do is make sure you’ve read the details and signed up online.
Should you offer Afterpay (for store owners)?
As a business owner, offering Afterpay or any other interest-free payment service has some pros and cons.
- Increase buyer conversions. Flexible repayment options make the transition from browser to buyer smoother.
- Higher purchase rate. Empower your customers to make additional purchases.
- Increased customer base. Appeal to a larger customer base, such as those who otherwise may not have been able to afford your products. You also have access to Afterpay's 3.1 million strong customer base.1
- Increased sales. Offering Afterpay as a payment option sees retailers averaging a 40% increase in average order value and new customer acquisition.1
- Decreased cart abandonment. Offering Afterpay sees an average 22% decrease in cart abandonment.2
- Fees. The cost of fees will depend on the transaction value and on your merchant agreement with Afterpay.
- Waiting for payment. Processing times for payment from customer transactions may vary, depending on Afterpay and your bank.
Watch: Afterpay vs credit cards: Which is better?
Have more questions about Afterpay?
The buy now, pay later sector is currently under an ASIC review. Find out more about this review.
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