You too Tradie and welcome back. The legislation passed the...

You too Tradie and welcome back. The legislation passed the Parliament at the end of November, the RBA now has the power to make regulatory changes effectively outlawing BNPL providers forcing merchants to absorb the costs of BNPL and the industry association AFIA is trying hard to present themselves as marketers charging marketing costs to merchants in exchange for more customers and website traffic, but the RBA uses the tight marketing rules attached to credit licence holders to push back. The RBA has asked for submissions and AFIA continues to ask for a stay into the future: until the BNPL industry gets on its feet; also saying that competition will sort out the high fees. That sounds a bit lane considering that the high fees at present are not enough to sustain it, so lowering them with competition will cause mayhem. It sounds as though there is going to be a brief consultation period, but ultimately the RBA is committed. ZIP has pulled out all stops to convert its Australian BNPL customers to ZIP Plus, a traditional credit card facility, which as an introductory rate of 12.95% and a maximum credit limit of $8,000.

'The RBA has expressed its desire for surcharging to become common in the BNPL sector, as it believes the benefits of no-surcharge rules for new market entrants are outweighed by efficiency and competition costs

3

. The central bank plans to conduct a review of retail payments regulation once proposed changes to the Payment Systems (Regulation) Act 1998 (PSRA) are in place

5

.It's worth noting that AFIA, which represents BNPL providers like Afterpay and Zip, has generally opposed changes to the no-surcharge rules

3

. They argue that competition within the sector will naturally lead to changes without regulatory intervention.'