The Australian Finance Industry Association has published the Buy Now Pay Later (BNPL) Code which commenced on 1 March 2021. It applies currently to 8 BNPL providers when they provide BNPL Products or Services.

The Code is a contractually enforceable commitment by the providers to comply with best practice standards for the sector and provide consumer protections.

BNPL Product or Service means:

• A shorter-term product or service for the purchase of goods or services where the purchase price is repaid in equal instalments. Consumers pay no extra charges if they pay within a specified period; or
• A product or service that is a continuing credit contract for the purchase of goods or services. Some contracts require a minimum periodic repayment; others involve a fixed repayment plan for each purchase. Multiple advances of credit may be available. Fees and charges are limited to $200 in the first year and $125 in each subsequent year; and
• There is a contract between the customer and the BNPL Provider, and a contract between the customer and the Merchant or Retail Partner; and
• The customer buys and receives goods or services from a Merchant or Retail Partner; the BNPL Provider pays the Merchant or Retail Partner for the purchase (minus merchant fees); and the customer repays the Buy Now Pay Later Provider for their purchase.

The Code does not apply to BNPL Products or Services that are offered as part of a product under the National Credit Code.

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