KARL STEFANOVIC:
Welcome back to the show. Well, millions of Australians rely on Buy Now, Pay Later. But up until now, there's been pretty much no regulation around it.
ALLISON LANGDON:
But that's about to change. Let's bring the Financial Services Minister, Stephen Jones, to break down how it's going to impact our shopping. Nice to see you this morning, Minister. This is something that has been largely unregulated until now. Have you heard many stories from people getting into trouble using these services?
STEPHEN JONES:
Look, we've heard lots of stories and that's why we want to get some evidence. Heard stories about people who say, look, this is a great innovation that helps me manage my money in a way that I was unable to do before and enables me to use my phone like a credit card. But therein lies the trap, this is not a credit card. It's operating outside the normal credit laws and a lot of people are getting into water - hot water. There's over 7 million – it’s a number that surprised me, there's over 7 million Buy Now, Pay Later accounts in Australia. Most of them for people between the ages of 20 and 35. The thing is, though, a lot of people have got not one, not two, but three or four Buy Now, Pay Later accounts. And it appears that there is a small percentage of the market where people are getting into hot water. We want to ensure that this product is operating safely, where it's being marketed, where it's being pitched to consumers. It's operating within the normal guardrails that operate with other credit.
STEFANOVIC:
Okay, so what changes will you be making?
JONES:
First, we're consulting with industry. We'll spend a few months consulting and I'll consider the outcomes of those consultations over Christmas. But as a minimum, I think putting in place some sort of credit checks to ensure that the product is affordable and suitable for the people that are being pitched at. We don't want to see people who are in the same situation they were in the bad old days of the credit card and other parts of the credit market where they might have had five, six, seven or eight credit cards. No one company knew that the other one had one and this person was just simply unable to pay off their debts and they're in a credit downward spiral. And that's what we want to address. We want innovation. We want people to have access to these great products, we want to ensure that there's proper guardrails in place.
LANGDON:
I mean, look, a couple of years ago there was an inquiry into this and it was decided that the industry should try to regulate itself. Clearly, that hasn't worked. So how quickly might we see greater government control over this? Because obviously this is a service that a lot of people are going to have to rely on in the lead up to Christmas.
JONES:
Yeah, still don't want to be talking about this by this time next year. I want to ensure that we have the consultation, we look at the industry code, the voluntary code that's in place at the moment, see where the gaps in that are. As I strongly believe will be the case, there is a need for further regulation that we can move that through Parliament and by this time next year at least, we're not having this conversation, but we're saying, well, this is a good product, it's giving people flexibility, but we know that where it's offered, it's occurring and safely.
STEFANOVIC:
All right, so you wanted to stay out of it, but you can't, and hopefully it will be done by this time next year.
JONES:
That's right.
STEFANOVIC:
Okay, thank you. Appreciate it.
LANGDON:
Thanks Minister.