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Innovation

Proposed Senate inquiry to examine buy now, pay later programs

Buy now, pay later provider Afterpay has welcomed a proposed Senate inquiry into parts of the finance sector not examined by the recent Hayne royal commission, stating it will participate in industry reviews and support appropriate legislation.

The Sydney Morning Herald on Wednesday reported on a proposal by Labor to investigate payday lenders, debt management firms and buy now, pay later businesses, such as Afterpay, zipPay and Openpay.

The proposal is all but certain to pass the Senate, as multiple parties have expressed interest in the inquiry going through, including the Greens, Derryn Hinch, Rex Patrick and Stirling Griff.

Afterpay’s stock price fell to $11.30 a share compared to $14 a share after the news broke on Wednesday. At the time of writing, shares in Afterpay had climbed back to $13.18.

The finance provider said it supports regulatory certainty for its business model and has been working with ASIC for some time as part of a review into the buy now, pay later industry, with the regulator stating companies such as Afterpay do “not meet the definition of credit within the National Credit Code” as they “extend funds without charging fees or interest”.

Afterpay noted that the New Zealand Government recently recognised that Afterpay’s model is different to traditional credit, and chose not to include it under local credit regulations.

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