After a flurry of negative news stories and social media outrage over an Auckland liquor store advertising it was offering ‘buy now pay later’, Kiwi BNPL provider Laybuy has called for urgency in introducing a government-backed code of conduct for the sector.
On Friday the Bottle-O outlet in Panmure, Auckland, posted on Facebook that it was now accepting payments through Afterpay.
The ensuing outrage and media attention - including reaction from Commerce and Consumer Affairs Minister David Clark that it “did nothing to build social licence” for BNPL – quickly caused a backtrack by the store.
But the owner claimed he was only following the example set by other alcohol retailers, and several are listed on the Afterpay website.
On Monday Laybuy managing director Gary Rohloff weighed in, saying the news “shows the urgent need for a government-backed Code of Conduct for the BNPL sector”.
“At Laybuy, we have a very strong view that BNPL should not be permitted to purchase alcohol, tobacco or for gambling. We back this up with a robust merchant sign-up process that sees us actively decline merchants who are primarily selling these regulated items. It is up to other companies to explain why they don’t do the same,” said Rohloff.
“Our strong view is that BNPL should be used for discretionary or big ticket items, which is why we also made the decision from day one not to offer Laybuy for essential services such as at supermarkets.”
The New Zealand government last year updated and tightened its responsible lending rules. Now there are calls on Clark to regulate BNPL like other forms of consumer lending.
Perhaps not surprisingly, Rohloff used the flurry of attention on BNPL to call instead for an industry code.
“While regulations might seem the easy answer, they are rigid and can quickly become outdated. An Industry Code, on the other hand, would not only ensure the sector was operating to agreed minimum standards but also allows the flexibility for updates to be made quickly without having to go through the formal regulatory process.“Instead, the Government should progress work to facilitate an industry Code of Conduct, similar to the one being advanced with the supermarket industry. The Code should outline obligations on the sector to protect consumers, including outlining what products should not be available to purchase by BNPL.”