Afterpay and Zip have shared differing opinions on new regulatory options put forward by the Treasury will impact the buy now, pay later sector.

In the Treasury’s paper, three options are offered. The first would amend the Credit Act to require that BNPL providers check that a certain product is affordable for a customer before it is offered.

The second option requires BNPL providers to gain a credit licence and operate within responsible lending regulations.

The third, and more strict option, would see BNPL loans enforced under the same laws as home loans, with the tighter checks this brings.

Treasury is seeking consultation by December 23, with plans to legislate in 2023.

Not surprisingly, Afterpay favours the first, least restrictive, option.

“We certainly do think that option one can deliver a lot of what the government is looking for in terms of balancing innovation and consumer protection,” said Michael Saadat, parent company Block’s head of international policy.

“The government has acknowledged that the buy now, pay later code has been working well, but I think has raised a concern that it doesn’t apply universally.

“Although it covered 95 per cent of the industry when it first came into force, we had a number of competitors enter the market, including from the major banks and companies like PayPal and they haven’t signed on to the code.

“We can understand that the government is looking for a framework that applies consistently to all operators and we are supportive of that.”

Zip prefers the second option, perhaps because it already has a credit licence.

“We have always held ourselves to higher standards, so we are certainly supportive of options two and three,” said Peter Gray, Zip’s chief operating officer.

“I believe that option two is most likely the most appropriate with regards to a genuine fit for our particular sector.”

Assistant Treasurer Stephen Jones said yesterday that the BNPL sector should simply be brought into step with the existing credit laws.

“We want to ensure that where these products are being offered, they’re being offered safely to consumers and people aren’t getting themselves into hot water,” he said.

“We have a template for regulating credit products. It’s the National Consumer Credit Act. We’re minded to bring buy now, pay later inside the National Consumer Credit Act.”