Buy now pay later services

Compare interest-free buy now pay later services available in-store and online.

By   |   Verified by David Boyd   |   Updated 7th October 2020

Comparing buy now pay later services

Laybuy

Laybuy

Maximum loan amount

N/A

Repayment

6 weekly instalments

Late fee

$10.00

Highlights

  • Spread the cost of your purchase over six weekly repayments with no interest.
Afterpay

Afterpay

Maximum loan amount

$1,000.00

Repayment

Four equal instalments paid fortnightly

Late fee

$10.00

Highlights

  • Zero interest finance with four repayments every fortnight. Available in-store and online.
Zip

Zip

Maximum loan amount

$1,000.00

Repayment

4 fortnightly instalments

Late fee

$8.00

Highlights

  • Interest-free finance on purchases in-store and online. Instalments over 6 weeks.
humm

humm

Maximum loan amount

$10,000.00

Repayment

5 fortnightly instalments or 10 weekly instalments

Late fee

$10.00

Highlights

  • Previously known as Oxipay, get interest-free finance with more flexible repayments. Higher line of credit.
Genoapay

Genoapay

Maximum loan amount

$1,000.00

Repayment

10 weekly instalments

Late fee

$10.00

Highlights

  • Interest-free on in-store and online shopping with 10 weekly instalments.

Overview

Buy Now Pay Later (BNPL) is a lucrative interest-free service that allows shoppers to receive an item immediately and pay for it in instalments. Popular service providers in New Zealand include humm (formerly Oxipay), Afterpay, Laybuy, and Zip Pay. Most schemes allow users to make payments in weekly or fortnightly instalments over several weeks.

Key features

Most New Zealand Buy Now Pay Later services offer between four and eight equally-spaced instalments, although provider policies will vary. Provided that users pay on time, there are often no extra fees or charges involved. But late payment incurs sizeable late payment fees, of between $6 and $10 each time. Service providers' earnings are mostly based on the fee they charge to retailers, a small percentage of the value of each BNPL purchase made by customers.

Applying for a BNPL account

There are lots of platforms New Zealand shoppers can sign up for, the most popular being Afterpay. Applicants don't need to pass a formal credit check, nor do they need to undergo an intensive application process. Provide your ID and contact information, link a valid credit card or debit card, get your personal barcode, and pay using BNPL at the checkout.

Online and in-store shopping

Shoppers can use Buy Now Pay Later as a checkout option when making a purchase online or in-store. You can purchase almost anything, including clothing, beauty products, homeware, electronic devices, automotive parts and novelty items.

Some BNPL services allow you to purchase e-gift cards for friends and family members to use at over 60 retailers. Exchange these gift cards via email or smartphone, or print out a copy when shopping in-store.

Payment options

Once you have opened your BNPL account, your app dashboard should show how much you can borrow. At this point, your account may undergo a soft credit check before you can confirm your purchase. Once approved, you may be able choose between several payment plans, including the interest-free weekly or fortnightly instalments, or, for larger purchases, a finance option involving monthly payments and interest charges.

Fees and interest

Monthly or weekly payments don’t accrue interest. The only fees that normally apply to your purchase will be late payment fees of between $6 to $10 per missed payment. But some providers may charge payment processing fees or monthly account-keeping fees if you have an unpaid balance at the end of the month following the month in which you made the purchase. Read each provider's schedule of fees and charges before choosing one that's right for you.

Note that it's also possible to incur interest on a purchase if shopping with a credit card instead of a debit card, if you don't pay off your credit card balance in full on the payment due date.

Refunds

Should you be dissatisfied with your purchase or receive it in a damaged condition, you must request a refund directly from the retailer. Whether you get a refund in full or in part will depend on the retailer's returns policy. Once approved, you will either:

  • Receive the full refund amount in your account
  • See the remaining monthly or weekly payments cancelled

Alternatives to BNPL

If you'd rather not pay using BNPL you have other options, including:

  • Store finance. You can pay off a large purchase in equal instalments and no interest within a store’s special-finance period. Note that you will receive an interest bill if you fail to pay off your full balance by the end of the period.
  • 0% interest credit card. Some credit cards offer an introductory 0% APR on purchases, usually for a period of 3-6 months, occasionally longer. During that time you need only make the minimum monthly repayments if you wish, but you can choose to pay off more to avoid accruing a large balance, plus interest if you fail to pay off your purchases by the end of the introductory period.
  • Store cards. Like a credit card, you can use a store card with a specific retailer, purchasing items on credit and paying them off at the end of the month.
  • Traditional credit card. Like BNPL, pay no interest if you clear your balance on or before the payment due date each month. However, unlike BNPL, most cards have an annual fee, but they may come with cashback, rewards points, or Airpoints, or complimentary benefits (like travel insurance or airport lounge access) to make the fee worthwhile.
  • Debit card. Using a debit card to pay directly (rather than linking it to a BNPL service) means that you are using your own money upfront. You won't risk late fees or interest charges, or run up a debt you can't afford.

Learn about buy now pay later services

How do they work, are they worth it, and what are the things to be aware of?

  • Pros & cons

  • Tips

  • FAQs

  • Guides

Accumulating late payment charges

Missing a payment can set you back anywhere between $6 and $10. In some cases, you can incur an additional charge for failing to pay on time after more than seven days. While $6 may not seem like much, missing all four payments means losing a minimum of $24. Payment processing fees and monthly account-keeping fees may also be charged by some providers.

Effortless account application

To open up an account, you won't need anything more than your contact information, New Zealand identification, a valid credit or debit card, and a smartphone. No need to fill out extensive forms or paperwork – you can even sign up while in line at the counter.

Impact on credit score and loan applications

While your BNPL account won't directly influence your ability to obtain a loan from a New Zealand credit union or traditional bank, some lenders may choose to review your BNPL payment history. If they find that you're unfit to handle a loan because of late payments, they can decline your application based on your records.

Instant gratification

For New Zealand shoppers who don't enjoy the process of saving up for a purchase, you can get your item immediately and distribute payments over a few weeks or months.

No interest charges

Unlike a credit card, you won't need to account for interest charges or additional purchase fees. Like a credit card, you might be subject to a spending cap.

Overspending and impulse buying

Equally-spaced weekly payments might give you the impression that your purchase costs less than it actually does. What appears to be a mere $25 cost adds up to $100 after four payments.

Choose a debit card over a credit card

Shopping with a credit card can be tricky to navigate with this type of payment scheme. Independent interest charges on your credit card mean each purchase you make may not always be interest free. Plus, spending your own money with a debit card means you're far less likely to end up in debt.

Only one BNPL account at a time

Because you won't find every BNPL service offered in every store you go to, you may decide to open an account with more than one provider. This will make your purchases and payments more difficult to track and keep a lid on. Aim to have no more than one BNPL account if possible.

Stick to a budget

With the ability to get your purchase interest-free before making any payment, it can be tempting to make several purchases at once. However, creating a budget which includes your regular bills like rent, food, utilities and transport, can help distinguish between purchases you want to make versus purchases you need to make.

Track your spending habits

Get on top of recording every purchase you make, especially if you have outstanding payments to satisfy. Though you certainly don't need to (because the repayments are automated), it can only help to set reminders for upcoming payments on a spreadsheet. Then you can make sure there's always enough money left in your bank account, or enough leeway in your credit card limit, to meet repayments and avoid late fees.

Can you choose how often you pay?

It depends on the service BNPL provider you're using. One service might accept weekly instalments, while another might accept fortnightly instalments on your purchase.

Can you pay less than the full instalment?

In a way, yes. You could make a custom payment on a purchase to reduce an upcoming instalment amount. If your weekly instalments charge you $50, for example, you could pay $60 at one time to reduce the next weekly payment to $40.

Do you need to pass a credit check?

No. There is no hard credit enquiry (i.e. a formal request for your credit history file) when you apply, although purchase approvals may require a soft credit check (which doesn't affect your credit score) for amounts over $1,000.

How do BNPL services make a profit?

Their business model is to earn revenue by charging the retailer a fee for each purchase made by customers using their service. The fee is calculated as a percentage of the purchase price, in much the same way as credit cards charge merchants a fee. But BNPL services also make money from late payment fees.

Where can you shop using BNPL?

You can use it in over 10,000 shops in New Zealand and Australia. You won't find every BNPL provider available in every store, but many larger stores will accept more than one form of BNPL payment. Rebel Sport, for example, accepts Afterpay, Laybuy and humm. The Warehouse takes Zip Pay and Farmers takes humm.

Why is there a cap on how much you can borrow?

If your account is new or you're not meeting instalments on time, the service provider might limit the amount you borrow. To increase your borrowing capacity, make more on-time payments in more significant amounts.