Buy Now Pay Later (BNPL) has become a common way for Australians to spread purchases across a series of payments. Although many services are promoted as interest-free, BNPL is still a form of credit and can have financial implications beyond the original purchase price.
The Reserve Bank of Australia (RBA) reported that Australian BNPL transactions reached around $20 billion in 2023, approximately double their value in 2020 and equivalent to around 2% of Australian card purchases. The RBA also found that accepting BNPL cost merchants approximately 3.5% of the transaction value on average—considerably more than typical card transactions.
For consumers, one consideration is how easily several relatively small commitments can accumulate. A $200 purchase divided into instalments may appear manageable in isolation, but multiple arrangements can create a larger series of repayments competing with rent, mortgage payments, bills and other expenses.
Fees can also affect the overall cost. ASIC’s Moneysmart notes that, depending on the arrangement, BNPL users may encounter late fees, account-keeping fees, payment processing fees or establishment fees. Additional bank charges could also arise if there is insufficient money available for an automatic repayment.
What about your borrowing capacity?
BNPL may also become relevant when applying for other credit. Moneysmart states that BNPL arrangements, applications and late fees may appear on a credit report, and lenders can consider this information when assessing applications for loans such as a mortgage or car loan. Multiple credit checks or missed payments may also influence a person’s credit profile.
More broadly, existing BNPL commitments may form part of a lender’s assessment of an applicant’s financial position and ability to meet additional repayments. This does not mean that using BNPL will automatically prevent someone from obtaining a home loan or reduce borrowing capacity by a particular amount. The outcome can depend on the lender, the BNPL facility, outstanding commitments, repayment history, income, expenses and other liabilities.
The regulatory environment has also changed. Since 10 June 2025, BNPL contracts have been brought within Australia’s consumer credit framework, with providers required to hold appropriate credit licences and comply with applicable credit obligations.
Ultimately, the potential cost of BNPL is not limited to fees. Spending behaviour, multiple repayment commitments, credit history and possible implications for future borrowing can all form part of the broader financial picture.
This article contains general factual information only. It does not take into account any person’s objectives, financial situation or needs and does not constitute financial, credit, taxation or investment advice.
