New Zealand Consumers Paid Nearly $20 Million in Afterpay Late Fees

Afterpay earned nearly:

• $20 million

from late payment fees in New Zealand last year, despite marketing its buy-now-pay-later service as interest-free.

According to company results:

• Afterpay generated:
  • $18.5 million in late fee income during 2024
• This increased to:
  • $19.7 million in 2025

The figures have sparked fresh debate around:

• Consumer debt
• Financial hardship
• Buy-now-pay-later regulation

How Afterpay Late Fees Work

Under Afterpay’s system:

• Customers pay no interest if instalments are paid on time
• Merchants cover service fees

However, missed payments trigger penalties.

Late fee structure:

• Orders under $40:
  • One-time fee up to 25% of order value
• Orders above $40:
  • $10 late fee initially
  • Additional $7 fee after seven days if unpaid

Fees continue accumulating until reaching:

• 25% of borrowed amount or:
• $68 maximum cap

Consumer Protection Concerns Raised

Consumer NZ warned that regulatory exemptions may be weakening financial protections for consumers.

Consumer NZ spokesperson:

• Gemma Rasmussen

said buy-now-pay-later providers became exempt from some fee protection rules under updated legislation introduced in late 2024.

According to Rasmussen:

• Late fees no longer need to directly reflect actual provider costs
• Multiple late fees can apply simultaneously across purchases
• Consumer safeguards are now weaker than traditional lending products

Financial Hardship Cases Rising

Consumer groups said:

• Financial stress linked to buy-now-pay-later debt continues increasing

Many users reportedly rely on BNPL services for:

• Food
• Petrol
• Essential expenses
• Alcohol purchases

Financial mentoring organisation:

• FinCap

said families are becoming trapped in:

• Debt cycles
• Escalating repayment pressure

FinCap spokesperson:

• Jake Lilley

said late fees on essential spending can push struggling households further behind financially.

Calls for Regulation Changes

Consumer advocates are now urging the New Zealand government to:

• Tighten BNPL regulations
• Review late fee structures
• Improve debt collection oversight
• Strengthen financial hardship protections

There are also growing calls for:

• Licensing debt collectors
• Revising consumer finance reforms currently moving through Parliament

BNPL Sector Arrears Improve Slightly

According to:

• Centrix

sector arrears improved slightly to:

• 8.8%

during April 2026 after several months of worsening repayment trends.

However, experts warn:

• Cost-of-living pressures continue increasing financial risks for households relying heavily on installment-based payment systems.