What is Afterpay changing?
Our late fee policy will be adjusted such that late fees will be capped at the lesser of 25% of the original order value or $68, regardless of the order amount.
Specifically:
- for each order below $40, the total late fees that may apply will be capped at 25% of the original order value;
- for each order of $40 or above, an initial $10 partial late fee will apply, and a further partial late fee (of up to $7) will also apply if the payment remains unpaid seven days after the due date. This approach will continue for all late instalments until the 25% cap is reached. There is no change to our existing maximum late fee limit of $68.
This change to our late fee policy for orders below $40 is currently effective. For orders of $40 or above, the changes will be effective and reflected in our updated Terms of Service on 19 June 2023.
How will this new late fees policy apply?
Afterpay orders below $40:
For example, a customer makes a purchase of $20 using Afterpay. If they are late on any repayment, they will be charged $5 (which is 25% of the original order value of $20) and no further late fees will apply.
Afterpay orders $40 or more:
For example, a customer makes a purchase of $60 using Afterpay. If they are late on any repayment, they will be charged an initial $10 late fee. If this remains unpaid for a period of seven days, they will be charged an additional $5 partial late fee. This takes their total late fees to $15 (which is 25% of the original order value of $60) and no further late fees will apply.
As a further example, a customer makes a purchase of $100 using Afterpay. If they are late on any repayment, they will be charged an initial $10 late fee. If this remains unpaid for a period of seven days, they will be charged an additional $7 partial late fee. If a future instalment is also late, they will be charged a further $8 partial late fee. This takes their total late fees to $25 (which is 25% of the original order value of $100) and no further late fees will apply.
Why is Afterpay making this change?
We believe that applying this cap on late fees will not only be easier for our customers to understand, but also remove any scenarios where our customers are subject to late fees which are disproportionate to their order value. This means that customers who make smaller purchases less than $40 will no longer be subject to paying a $10 fixed late fee (which was more than 25% of their order value) and previously led to these potentially disproportionate scenarios.
Will I be paying more late fees as part of this new policy?
By enabling partial late fees, there may be some scenarios where you will pay slightly more in late fees than you would have under our previous policy for orders $40 or more. However, our new late fees policy means that they will always be capped at the lesser of 25% of the original order value or $68, regardless of the order amount.
We are committed to encouraging responsible spending and will continue to do everything we can to help you avoid late fees, including sending payment reminders and alerts if payments have failed.
I’m an existing Afterpay customer and created my account before 19 June 2023. What do I need to do to continue using my Afterpay account?
All of our existing Afterpay customers will be asked to read and accept the updated Terms of Service on 1 June 2023 before continuing to use their Afterpay account. By continuing to use your Afterpay account on and from this date, you are agreeing to the updated Terms of Service. If you do not agree to the updated Terms of Service, we will provide you with information on how to close your Afterpay account and manage any outstanding payments/orders you have. Please feel free to contact us via the mobile app or webform.
I created my Afterpay account on or after 19 June 2023. What do I need to do to continue using my Afterpay account?
Nothing! When creating your Afterpay account on or after this date, you would have already agreed to the updated Terms of Service, which will apply to your use of the Afterpay service.
What terms and late fee policy applies to my existing Afterpay purchases?
All Afterpay purchases made on or after 19 June 2023 will be subject to the updated late fee policy and Terms of Service where you have agreed to them.
If you do not agree to the updated late fee policy and Terms of Service, the prior version of the policy and Terms of Service will apply to all Afterpay purchases made before 19 June 2023, including any instalments to be paid after this date which relate to purchases made before 19 June 2023. To continue using the Afterpay service to make purchases from this date, you will need to agree to the updated Terms of Service.