Buy Now Pay Later (BNPL) has reshaped how Australian consumers engage with credit — and new reforms are set to drive the next phase of this evolution.
In June 2025, Australia’s BNPL sector officially entered a new regulatory era. Under the latest reforms, BNPL providers like Afterpay must now hold an Australian credit licence, conduct credit checks on new customers and comply with modified responsible lending obligations. The changes aim to protect consumers, promote responsible spending, and create consistency across the credit market — recognising that BNPL is a distinct, low-cost credit product.
To support retailers in understanding these shifts, Afterpay and Experian partnered on a first of its kind report: The Next Chapter of BNPL: An Evolution in the Credit Market. Drawing on a survey of 1,000 BNPL users and credit bureau data, the report highlights the opportunities and challenges ahead for retailers, providers, and consumers alike.
BNPL consumers: confident and credit-conscious
BNPL customers are far from financially irresponsible or high risk. The report found that Afterpay customers have an average Experian credit score of 743 — comparable to credit card applicants (771) and well above personal loan applicants (646). These insights challenge the myth that BNPL users rely on instalment payments due to poor credit standing.
BNPL is increasingly part of a deliberate, credit-conscious approach. Nearly 80% of BNPL customers say that building good credit is important to them, and around one in three rank it as “extremely important.” Moreover, 46% of surveyed customers believe that responsible use of BNPL can help support their credit health.
Generational trends driving adoption
The appeal of BNPL spans generations, but younger Australians are leading the way. The report found that 90% of Gen Z shoppers and 82% of Millennials use Afterpay, reflecting a strong preference for transparent, interest-free payment options over traditional credit cards. Gen Z in particular views BNPL as a budgeting tool, with 37% using it weekly to manage everyday spending.
However, this group also showed the greatest gaps in awareness. Misconceptions — such as BNPL now charging interest or no longer being available online — were more common among younger users.
Low awareness, but high trust in the reforms
Despite low awareness of the regulatory changes (only 18% of BNPL customers correctly identified the introduction of credit checks), the sector’s move towards regulation has been welcomed by consumers.
The report found:
- 62% of BNPL users feel more confident using BNPL now that it is regulated
- 56% trust BNPL providers more with credit checks in place
- 58% feel more aware of BNPL’s risks and responsibilities
Retailers can build on this trust by offering flexible, transparent payment options and clearly communicating the features and benefits of these services.
Why this matters for retailers
The evolving BNPL landscape isn’t just about compliance — it’s about building consumer confidence and driving loyalty. Shoppers are increasingly looking to retailers and providers that align with their values of transparency, responsibility, and financial wellbeing.
Afterpay, for example, has long championed responsible product design. The report highlights Afterpay’s built-in consumer protections, including dynamic spending limits that adjust based on repayment behaviour, accessible hardship support, and a longstanding commitment to industry standards like the BNPL Code of Practice.
Retailers that partner with providers prioritising these practices are well-placed to build lasting customer relationships in this new environment.
What’s next?
BNPL is now formally part of Australia’s regulated credit ecosystem — but the journey doesn’t end there. The sector’s next challenge is to continue educating consumers, clarifying product features, and addressing misconceptions. Retailers have a role to play too: helping customers make informed choices and demonstrating their commitment to responsible, customer-first credit options.
For retail businesses, the opportunity is clear: by embracing the next chapter of BNPL, you can offer payment solutions that meet evolving customer needs while strengthening trust in your brand.
Learn how BNPL can help your business drive customer loyalty in a changing credit market. Read the report.
