Afterpay's $20 Million Late Fee Bill Raises Financial Hardship Concerns for New Zealanders

Afterpay generated nearly $20 million in late fees from New Zealand users last year, prompting consumer advocates to warn that regulatory exemptions for buy-now-pay-later (BNPL) services are worsening financial hardship amidst persistent cost-of-living pressures, impacting families including many Filipino households.

Subscribe to newsletter

Buy-now-pay-later (BNPL) provider Afterpay amassed close to $20 million in late fees from its New Zealand users in 2025, reaching $19.7 million, up from $18.5 million the previous year. While Afterpay promotions emphasize interest-free payments, fees are incurred when installments are missed. These charges can include a one-time late fee of up to 25 percent for orders under $40, or a $10 fee for orders over $40, followed by an additional $7 if unpaid after seven days, capped at 25 percent of the total borrowed or $68, whichever is lower.

Consumer advocates are raising alarms over these escalating fees. Consumer NZ spokesperson Gemma Rasmussen highlighted that since November 2024, BNPL providers have been exempt from specific sections of the Credit Contracts and Consumer Finance Act (CCCFA). These exemptions mean late fees no longer need to reflect the true cost incurred by lenders and can be applied simultaneously across different purchases, weakening consumer protection compared to other credit products.

FinCap spokesperson Jake Lilley echoed these concerns, noting that when individuals pay late fees on essentials like petrol or food, they risk a 'debt treadmill' that exacerbates their financial struggles. Kislap infers that Filipino households in New Zealand, a significant migrant group often navigating substantial cost-of-living pressures, are among those vulnerable to these practices as they strive to manage daily expenses.

The issue of public and private debt in New Zealand has been a subject of ongoing concern, as noted in reports by agencies like the Social Wellbeing Agency. The Ministry of Business, Innovation, and Employment (MBIE) has previously engaged in consultations on BNPL, exploring how its use could trigger financial hardship and identifying options to address these risks, underscoring the government's awareness of potential vulnerabilities.

Financial mentors continue to express frustration, reporting that difficulties with BNPL repayments add significant pressure to families they support. FinCap advises individuals facing repayment challenges to contact their lenders early or seek free, confidential support through the MoneyTalks helpline. They are also advocating for the licensing of debt collection agencies and urgent reforms to BNPL regulations as part of broader financial service reforms.