Pub now, pay later: Afterpay?s move into Australian dining venues sparks debt concerns - The Guardian Australia

The expansion of Afterpay and other buy-now-pay-later products into pubs and restaurants could lead to bigger debts for people already struggling financially, consumer advocates warn.

Concerns were raised last week after news that pub giant Australian Venue Co had partnered with buy-now-pay-later (BNPL) monolith Afterpay to roll out the facility in the 160-plus venues it operates nationally.

Afterpay and other similar products like Zip Pay and PayPal have been available in retail outlets for some time but the latest development heralds the arrival of the biggest BNPL provider into the Australian hospitality industry.

Katherine Temple, the director of policy and campaigns at the Consumer Action Law Centre, said her organisation was already working with an increasing number of people struggling with BNPL debts.

Because BNPL debts don’t accumulate interest in the way a credit card or bank loan does (there are late payment fees instead), companies are not subject to the same regulatory requirements regarding responsible lending.

Financial Counselling Australia was seeing more and more people relying on BNPL products to pay for essentials such as groceries, Hunt said. Those suffering from a debt spiral had often opened accounts with multiple BNPL companies.

Hunt and Temple both called on the federal government to close the regulatory gap to ensure consumers have a safety net when they use BNPL products.

Australian Venue Co told Guardian Australia the company was introducing Afterpay due to customer demand.

It is against the law for gambling providers to offer forms of credit to punters, but the regulatory grey area in which BNPL companies operate - and the expansion into venues with poker machines or other forms of betting - has raised questions about its potential to exacerbate gambling problems.

Afterpay would only be available on food and beverage purchases at Australian Venue Co’s venues, and not for any purchases in gaming rooms or any area where wagering takes place, or any venues that did not serve food, the spokesperson said.

Afterpay said its product was limited to dining and hospitality.

Australian Venue Co expects to offer Afterpay as a payment option by the end of this week.