Amazon Adds Buy Now, Pay Later To Oz Site, Despite Dutton Fears
Amazon has reportedly added Australia’s Zip Co’s buy now pay later platform as a payment option for purchases made on the online marketplace, revealing the growing popularity these services have despite the current regulatory scrutiny placed upon them.
Going live Thursday the Zip payment platform the deal will see the company issue warrants to buy 14.6 million of its shares to an affiliate of Amazon, as reported by Reuters.
Signifying a generational switch from traditional credit routes, Millennial and Gen Z shoppers are being credited with the boom in buy now, pay later (BNPL) services due to difficulty in accessing credit.
According to its website, Amazon offers two zip products – Zip Money and Zip Pay.
‘Zip Pay is an interest-free online shopping wallet with a credit limit offered by Zip of up to $1,000, and Zip Money is a line of credit offered by Zip for larger amounts, generally above $1,000, with an interest-free period of six months.’
According to new research from Roy Morgan, 1.95 million Australian’s used a BNPL digital payment method this year, up from 1.38 million in the previous 12 months.
Despite this, only 9.4% of Australia use BNPL services, meaning the industry still has a long way to go until it can topple the credit card industry.
Dominated by Australian’s aged 14-34, the younger demographic accounts for 55.9% of BNPL users.
As the industry continues to grow, credit card use is showing signs of decline, with Australian credit card holders dropping by 3% over the past year.
This drop in credit card use has also resulted in a reduction in credit card debt over the last decade down to $7 billion today compared to $8 billion in 2007.
However, considering the position BNPL services hold outside of existing financial regulations, calls for greater scrutiny from the banking sector and consumer groups were quick to swoop in.
‘[BNPL] companies are likely to pose a threat to traditional deferred payment options including credit cards, as consumers can easily access a small amount of credit instantly,’ according to Roy Morgan CEO Michele Levine.
The financial crime watchdog AUSTRAC demanded an external auditor report of Afterpay Touch Group earlier this year, suspecting the company of non-compliance with money-laundering and counter-terrorism financing laws.
It comes ahead of a speech from Peter Dutton, who is expected to warn Australia of the ‘increasingly sophisticated’ use of technology by terrorists, such as crypto-currencies, encryption and social media to fund and plan their attacks.
Revealed today in The Australian, the exclusively obtained speech outlines the fresh challenges posed to authorities by the ‘virtual world’.
According to the advance copy of the speech, Peter Dutton will tell the No Money for Terror conference in Melbourne that, ‘just as the virtual world has become a popular vector for transnational, serious and organised crime, it is likely those who wish to support terrorism will increasingly transact online’.
It follows calls from the Home Affairs minister to face-scan people watching porn in order to ascertain whether that person is of legal age to be watching other people having sex.
‘This could assist in age verification, for example by preventing a minor from using their parent’s driver licence to circumvent age verification controls,’ the Department wrote to a parliamentary inquiry.
It seems Mr Dutton is entirely concerned with ‘the anonymity afforded by such technologies’ that supposedly enables not only terrorists but also teenage-porn-watchers ‘to obfuscate their activities’.
According to Mr Dutton, ‘this is a risk we must stay ahead of’.
‘We must starve these vile individuals and groups of the resources they require to do us harm.’
So Australian’s get your VPNs ready and get your BNPL purchases in now before the Home Affairs minister swoops in to shut it all down.
I mean, will somebody please think of the children?