This is excellent news! It's exactly the option Zip was after.
The BNPL industry has had to tighten its lending criteria anyway, in order to achieve profitability. It will have to continue to apply tigher lending criteria if - once it becomes profitable - it is to remain profitable.
The responsible lending obligations of the Credit Act will be "scaled to the risk" involved in particular products - i.e. a tailored version of the Credit Act will be applied. There were three options put forward. Afterpay supported the least difficult option (Option 1). Westpac supported the strictest option (Option 3), but Zip and CBA wanted Option 2, a middle path. Option 2 is the one that is being implemented.
From the AFR:
The least onerous of three options presented to the government in November, by Treasury, included amending the Credit Act to impose a requirement to check that a product was “not unaffordable” for a person before it is offered to them, plus self-regulation. The most onerous option would have treated BNPL like credit cards and other loans requiring full credit act regulation.
The government has chosen the middle option, placing the sector in the Credit Act and applying a tailored version of responsible lending obligations, which will require providers to assess BNPL “is not unsuitable” for a customer.
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