Afterpay

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.

You pay the first quarter of the purchase price at checkout, with the remaining quarters to be paid back every 2 weeks after that date. 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. All this information will be communicated to you before you've paid, so you can always make an informed decision.

See the full Afterpay store list

Features of shopping with Afterpay

• No interest. Working in a way similar to a no-interest loan, the only charges a customer will pay are their instalments every 2 weeks, and any applicable late fees.
• 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 organisation. This is the highest level of payment security there is, for both your card details and your personal information.
• Earn rewards. Shopping through Afterpay and paying each of your instalments on time can earn you benefits through Afterpay's Pulse Rewards program. These rewards range from discounts at stores to being able to postpone your upfront quarter payment from checkout to 2 weeks after your purchase.

How much does Afterpay cost?

There are 2 costs involved with Afterpay. Firstly, there is the cost of the item you're buying. The other cost 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, followed by another $7 for every 7 days your payment is late.

Late payment fees are capped at 25% of the cost of the order, or $68 – whichever is less. For example, a $40 order will not incur late fees above $10, and a $400 order will not incur late fees above $68. If you believe you are unable to pay an instalment, you should contact Afterpay to discuss your options.
If you consistently fail to make repayments, Afterpay holds the right to report it to a credit reporting bureau.

What should I be aware of with Afterpay?

Afterpay and other buy now pay later services can hold a place within your financial toolkit. But like all financial products, there are things that you should watch out for.

• Don't spend more than you can afford. While breaking your payments up into parts can make products seem more affordable, you are still paying the same amount for that product. Ensure that you can comfortably make each of your instalments so that you avoid any late fees.
• The fees can add up. While Afterpay caps its late fees at $68, that amount is per order. If, for example, you fail to make payments on 4 orders, you will be facing late fees of up to $272. If you believe you won't be able to make a payment on time, be sure to contact Afterpay directly to try and work out a solution with them.
• It could affect your credit score. Afterpay claims it avoids sending defaulted or late payments to credit bureaus, and that it will work with its customers to solve any financial difficulties. However, it does reserve the right to report defaulted payments to a credit bureau or to a third party collections agency.

Is there a limit to how much you can spend with Afterpay?

Afterpay limits your spending based on your history with the service. New accounts will be limited to $500, and this amount increases based on a number of factors based around how long you've used Afterpay and whether you've made your payments on time. Your spending limit may be reduced if you fail to make your payments on time, and the more consistently you miss your payments, the more your limit will be restricted. In short, your limit will increase the more you make your payments on time and will be reduced the more you fail to do so.

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.

Watch: Afterpay vs credit cards: Which is better?

Have more questions about Afterpay?

• How does Afterpay make money?

  Afterpay doesn't charge customers to use its service, but rather makes money by charging retailers fees for offering the service. It also makes some money (approximately 20%, according to an ASIC inquiry into the sector) by charging customers late fees.

• Is it really interest-free?

  Afterpay's platform will not charge you interest. However, if you use a credit card as your payment method, then you can be charged interest through your credit card provider. Interest-free periods on credit cards are usually 55 days if you have paid your previous statement period's balance in full, whereas Afterpay offers repayment terms of 56 days. Check the interest-free period on your credit card and aim to repay it within that time frame if you really don't want to be charged interest while using Afterpay.

• Can I get a refund on an item I've purchased with Afterpay?

  Yes, full and partial refunds are available. Keep in mind you may be charged for the item by Afterpay if an instalment is due before the retailer has processed the refund. However, Afterpay will refund you any of these payments after the refund has been processed.

• How do I know how much I have to spend each time I make a purchase with Afterpay?

  While you will be shown an estimate of your credit limit each time you log into your account, Afterpay uses an automated system to approve you for an amount on a purchase-by-purchase basis. According to Afterpay, the longer you've held an account and the more purchases you successfully repay, the more likely you are to be approved for a higher amount.