Afterpay vs. Humm

• Afterpay and Humm offer a similar service, but there are important differences.
• Find out how repayments work, spending limits, and credit score requirements.
• Compare fees and repayment plans for both.

Afterpay have blazed the trail for Buy Now Pay Later services in Australia. Having proven the model, it's unsurprising then to see more players enter the market. If you are looking for an alternative to Afterpay —especially if you want to buy more expensive goods and services — then Humm might be worth considering.

To help you make up your mind, here’s what you need to know when deciding which service best compliments your needs.

How Afterpay works

Afterpay is an in-demand buy now pay later (BNPL) platform that allows shoppers to receive their goods immediately and repay the item in fortnightly instalments. Founded in Sydney in 2015, the service is now available across 10,000 retail, pharmaceutical, and travel shops in Australia. These include big-name brands such as K-mart, Target, Big W, and Officeworks.

To sign up for Afterpay, you’ll need to be at least 18-years-old with a valid and registered debit or credit card. Then, simply fill in your contact information. A temporary barcode will reflect an allocated spending amount. How much you can spend will depend on a pre-authorisation check on your card against the amount of your first instalment.

To shop with Afterpay, scan your barcode at the register in-store or select it as a checkout option online. You’ll have to make the first payment – 25% of the purchase – up-front and make the remaining payments over eight weeks. You can make manual or automatic payments using the Afterpay app or website. Note that you can’t make payments using a bank transfer, prepaid card, or BPay.

How Humm works

Humm is a BPNL initiative by FlexiGroup that enables users to repay purchases from as little as $1 to as much as $30,000. It covers a considerably more extensive range of investments than most BPNL systems, allowing users to shop using a “Little Things” (for up to $2,000) and “Big Things” wallet (for up to $30,000).

Users can repay Little Things items in 5 to 10 instalments – or slices – and Big Things items in 6, 12, 24, or even 60 months.

To sign up, you must be at least 18-years-old and an Australian citizen or permanent resident. You must present proof of an active job (a minimum of 25 hours a week) or be receiving aged or veteran’s pension. You cannot be declared bankrupt.

After providing your contact information and opening your account, you can immediately access your Little Things wallet. The initial spending limit will be reliant on the financial information you provide upon submitting your application. If the cap isn’t what you’d hoped, managing your repayments over time will give you access to more credit.

To increase your spending limit, you can opt to “boost” your account by providing more information, such as bank statements. So long as you remain within your spending limit, you can purchase as many Little Things items as you wish.

Big Things become available to users who share more details regarding their income and bank history. Depending on your documents, you can begin shopping for items worth $10,000 or get pre-approved for up to $30,000 if you apply in-store.

You can only shop for Big Things in-store, using a barcode generated on your account.

Feature comparison

Repayment frequency

• Afterpay: You must repay Afterpay purchases in four two-week instalments, each measuring up to 25% of the item’s total cost. You will incur a late fee for missing the payment, and another for missing the payment over seven days.
• Humm: Repayments with Humm are more flexible than most BNPL initiatives. You can pay back Little Things purchases in five or ten instalments weekly or fortnightly. For purchases over $2,000, you can choose to pay back the amount in 6, 12, 24, or up to 60 months with specific retailers.

Borrowing limit

• Afterpay: Spending limits are low when you first open up an account, increasing after you’ve established a reliable repayment history. Per transaction, you can make a maximum purchase of $1,500 and hold a maximum outstanding account limit of $2,000. Order limits will vary depending on the retailer you shop with. Afterpay will typically approve one order at a time, limiting your ability to make purchases with the platform if you miss a repayment date.
• Humm: Your available spend limit will depend on the credit history and additional financial information you provide. After making successful repayments on at least two plans, you can begin to increase the number of purchases you make at once. For additional Big Things buys, you will incur a repeat purchase fee of $22.

Credit check

• Afterpay: So long as you’re of the required age and can provide a valid debit or credit card, Afterpay won’t run a credit check. It may, however, opt to do so when shopping with a specific retailer or approving costlier purchases.
• Humm: Humm will perform a soft credit check upon application. Doing so won’t affect your credit rating, although it may determine your spending cap. Any delayed instalments can negatively impact your credit score in the future.

Online & offline use

• Afterpay: To make a purchase, users can refer to the Shop Directory and select the Afterpay payment method at checkout. First-time shoppers must provide payment information – returning shoppers can access them automatically. Shoppers can check out with their barcode when shopping in-store – the entire process takes a matter of seconds. Note that Afterpay will not approve 100% of orders depending on: fund sufficiency, length of use, repayment amount, order value, and the number of active payment plans.
• Humm: With Humm, you can choose to shop in-store or online, with Little Things items comprising retail, beauty, technology, homeware, lifestyle, and more. Big Thing items might include home improvements or medical treatments such as dental surgery or IVF.

Cost comparison

Account fee

• Afterpay: There is no fee to retain an Afterpay account. The only costs involved are the price of your purchase and potential late fees.
• Humm: There is no fee to retain a Humm account.

Interest rate

• Afterpay: There are no interest charges on Afterpay purchases.
• Humm: There are no interest charges on Humm purchases. However, you will accrue a monthly fee of $8 for Little Things and Big Things purchases that you repay over five months. Depending on the total cost of your Big Things item, you may have to pay an establishment fee of between $35 and $90.

Late fee

• Afterpay: Missing a payment charges $10. If you fail to repay the missing instalment after seven days, you’ll sustain another $7 fee. Orders below $40 can only run up a total of $10 in late charges, whereas orders above $40 can suffer a higher maximum fee of $68 – or 25% of the original order.
• Humm: Regardless of the purchase price, a late fee of $6 will apply to Little Things and Big Things.

Pros and cons

Which service is better?

Between Afterpay and Humm, the superior platform will really depend on your individual requirements. However, it can be broadly summed up as Afterpay for consumer shopping and Humm for bigger ticket spending.

Given the maximum credit line available, Humm is clearly more suitable if you need to finance home renovations or medical procedures. However, you will have to undergo a more exhaustive credit check to qualify for more expensive items (much like you would when applying for a personal loan).

On the other hand, Afterpay employs a less meticulous approval process and is ideal for those looking to make a number of smaller purchases as soon as possible. Note that Afterpay does charge a higher late fee, with an additional fee for missing a payment over seven days.

Alternatives to Afterpay and Humm

There is no shortage of competition in Australia for interest free instalment finance. Check out our Buy Now Pay Later comparison where you can rate Afterpay and Humm against peers including Zip, Klarna, and LatitudePay.