Afterpay In Firing Line Again As ‘Responsible’ Rival Names & Shames
Buy Now, Pay Later (BNPL) giant Afterpay is once again in the firing line after a fintech company slammed it for failing to market itself as a credit product.
Douugh, a fintech banking firm headquartered in Australia, came to a trading halt before announcing it would launch an interest-free BNPL product as part of its “financial wellness” neobanking app.
The BNPL service will be available only in the US at first after Douugh raised $12 million in a capital raise.
It will be known as ‘Credit Jar’ and offers customers a credit limit of up to $1000, paid back over six weekly instalments.
Douugh CEO Andy Taylor said Credit Jar will be a ‘sensible, credit-base product’ will be in no way like BNPL giants Afterpay or Zip pay.
Customers will be subject to full credit and responsible lending checks, which BNPL rivals do not offer.
The service is intended to be used as a safety net for unexpected expenses rather than impulse buys, Taylor says.
“I’ve always been a firm believer that responsible lending and trying to help customers consolidate credit card debt is what we need to do, and buy now, pay later has just incentivised the wrong behaviour in terms of instant gratification around consumable goods,” Taylor told the Australian Financial Review.
“I’m in [Commonwealth Bank CEO] Matt Comyn’s camp on this one, Afterpay and other buy now, pay later [services] are credit products and they need to stop pretending it isn’t and make sure people can afford it.
“I get that they say they are a marketing platform for retailers, but they are still giving credit to anyone that will just attach the debit card without doing any assessment. I mean, that’s just wrong.”
Douugh is the second BNPL company which has taken umbrage with the likes of Afterpay in recent weeks.
CBA-backed Klarna described BNPL merchant fees as “extortionate” and called for better regulations.