What is Afterpay and how does it work? | Tips & Tricks

In this day and age, it seems that technology is constantly evolving and there is a new way of doing things every single day. There are many payment options online like PayPal, but none like the latest shopping craze which is . is a digital service that started off last year, which makes it possible to buy an item and pay it off over installments when you don’t have the funds to fork out right away.

Afterpay isn’t just an online craze. Some big retail outlets mentioned here offer the service in-store as well, which means you can go shopping interest free if you need to, before payday and pay later. As some stores now offer it in-store, a lot more will start doing so and it could even phase out layby in the future, since you get your item straight away and don’t pay any more other than the cost of the item.

So, how does it ?

The first step to using AfterPay is to signup through their website here. Once signed up, you’re free to start shopping online by choosing the option for Afterpay at the checkout if you’re shopping on a website which offers the service. When using this service, you aren’t charged anymore than the cost of the item, unless you miss a payment, which can result in a $10 fee and a further $7 if you fail to make the payment within a week. Purchases made using Afterpay are paid in installments, fortnightly, usually over the span of four payments and don’t start until exactly two weeks after purchasing an item.

Is it better to use Afterpay, compared to using a credit card?

Statistics show that demographically the main target market for Afterpay are 18 to 34 year olds. A service like this which allows you to shop and pay later works in favour for this market as people aged in their early 20’s to mid 30’s tend to shop the most due to their social lives and are usually trying to save money, going to Uni or have just moved out of home, trying to avoid having a credit card.

For others who have a credit card and struggle to meet their payment terms sometimes, due to various other expenses that tend to come up every time they try to pay off their credit cards, a service like this also works in favour for them as they will have longer to pay for their item than the time they get to pay off their credit card and can budget their spending money with their Afterpay payments.

How do refunds work with Afterpay?

In terms of refunds for items purchased through Afterpay, after all installments are made, involvement between Afterpay, the shopper and the retailer cease 120 days later. So, if a refund is required to take place within the time-frame of 120 days, the retailer will repay Afterpay and the payment will be passed onto the shopper after.

What about those who fail to make payments?

With services like this, you have to wonder what happens to those who fail to make all payments on items they have purchased with Afterpay. The terms and conditions for Afterpay state that they will use third party collection agencies to recover any unpaid debt, which is a good practice for them to have in place as there are initially no credit checks when you sign up.

What’s installed for the future?

We hope that in the future all stores which currently offer a layby service start offering this service in-store as it means people will get their item straight away and won’t have any additional fees to pay.

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