Afterpay, a popular buy now, pay later (BNPL) company, has announced that it will be introducing a self-regulated spending cap feature for its Australian users. This new feature is set to launch later this year, giving users the ability to set a cap on their spending within the app with just a few taps.
Previously, Afterpay had already implemented an estimated spending limit for users based on their payment history, taking into account factors such as the number of late repayments and frequency of on-time repayments. The introduction of the self-regulated spending cap comes as a response to concerns raised by Finder, revealing that one-in-three Australian users have missed bills in order to meet their BNPL repayments in the past year.
It is reported that 2.4 million Australians have prioritized their BNPL debt over other bills, highlighting the potential financial strain that these services can cause. Despite the average BNPL debt in Australia decreasing from $1776 in January 2022 to $964 in September, concerns remain about the impact of these services on users, particularly Gen Z and millennial Australians.
Graham Cooke, head of consumer research at Finder, has emphasized the importance of responsible use of BNPL services, urging users to exercise caution and avoid relying on them for everyday expenses. While BNPL products like Afterpay offer convenience, they also come with risks such as overspending, late fees, and potential debt accumulation.
It is crucial for users to be well-informed about the risks associated with BNPL products and to carefully budget their finances to avoid falling into financial hardship. Before making any financial decisions, individuals should consider their personal objectives, financial situation, and needs to ensure responsible use of these services.
As Afterpay prepares to roll out the self-regulated spending cap feature later this year, users are encouraged to take advantage of this tool to better manage their spending and avoid excessive debt. By setting a limit on their spending within the app, users can exercise greater control over their finances and make more informed decisions when using BNPL services.
It is important for users to stay informed about the latest developments in the BNPL industry and to prioritize financial responsibility when using these services. By staying informed and practicing prudent financial management, users can mitigate the risks associated with BNPL products and ensure a more secure financial future.
