Is Australia’s Buy Now Pay Later boom at an end?
Summary
Afterpay continues to operate at a loss in Australia but has expanded its services to new areas, including event venues. The Buy Now Pay Later (BNPL) market in Australia has slowed down due to new regulations and competition from traditional credit cards, leading some companies to exit the market.Key Facts
- Afterpay has never made a profit in Australia and recently bought naming rights for a Sydney Olympic Park arena.
- Australians spent much more with credit cards ($22 billion in 2025) than with BNPL services.
- Spending growth on BNPL platforms slowed from $3 billion a year to $1.5 billion by 2025.
- At least eight BNPL companies have left the Australian market since 2022, leaving four major players: Afterpay, PayPal, Klarna, and Zip.
- New Australian laws in 2025 required BNPL companies to do credit checks and report accounts, slowing approval processes and reducing BNPL use.
- Some BNPL customers face late payment fees, with Afterpay reporting a 2.9% rate of accounts three months overdue.
- Businesses pay about 3% fees to BNPL companies per transaction, higher than credit and debit card fees.
- Afterpay earned $625 million from merchant fees in 2025 but still had a $741 million pre-tax loss in Australia.
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