Afterpay Day – in reality a four-day sales promotion from the buy now pay later (BNPL) platform – encourages Kiwi shoppers to “seize the deals.”
Sasha Lockley, co-founder and CEO of ethical debt consolidation provider Money Sweetspot says the deals are more likely to seize you – and not let go.
“We provide affordable debt consolidation and support to Kiwis who’ve found the debt juggle has turned into a struggle. And you know the one thing many have in common? Buy now pay later debt like Afterpay!”
“While the allure of Afterpay Day’s ‘unbelievable deals’ is undeniable, the hidden reality is a far cry from the initial excitement. We’ve observed a troubling trend: most people who come to us for help are ensnared in debt to Afterpay and similar services. They find it easy to see how much more they could spend, but battle to keep track of the repayments and how much they owe.”
The (somewhat judgmental) assumption that people use BNPL services for spending splurges simply isn’t untrue. Even Afterpay’s own marketing report, that sought to entice retailers into participating in the Afterpay Day, acknowledges that the fastest-growing categories year on year include food and beverages in 2nd place and utilities in 3rd.
Not exactly a thing to celebrate whilst foodbanks experiencing funding cuts whilst also feeding 165% more families, and Centrix reports that 4% of Kiwi are behind in their energy bill, and 12% behind in their phone bills- a record high!
It’s a grim reality.
Money Sweetspot urges a critical examination of financial habits and the cultivation of responsible spending. The recent Centrix report revealed a concerning statistic: 9% of BNPL users lag over 60 days behind in payments, illustrating the deteriorating financial situation of many Kiwi- especially those in their 20s who have only just started their financial journey.
Money Sweetspot stands out by celebrating each customer’s departure, seeing it as a victory in freeing another household from debt’s grasp. This contrasts sharply the model used by Afterpay and other providers, which gamifies and incentivises spending without any notable offer of financial education or information to support their customers to make informed choices.
“We love innovation in financial services,” Lockley says, “but we’re sick of seeing the same story every time we try to help someone get out of debt. I’m glad Afterpay Day is behind us but I’m not looking forward to dealing with the consequences.”
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