A decade ago, credit cards ruled the financial universe. You weren’t in unless you had a plastic payment. One could say that having these cards made or broke your pecuniary standing. You almost always needed a good credit rating to be approved. If you maintained this, even while serially flashing off your Amex, then you will get rewarded even more. It was like having the keys to the kingdom. For a few decades, the credit card era continued. In the late 2000s, debit cards nearly replicated the function of a credit card. Like the latter, you could tap and go and pay online. You could use your debit Visa or Mastercard anywhere that they are accepted. This means that they could come in handy when you’re travelling overseas. Moreover, you could use the card to pay overseas merchants.

The Birth of BNPL

In the mid 2010s, buy now pay later providers offered another option. This time, you did not need a line of credit. You could apply and be approved even without furnishing your credit score. All you needed was a valid credit or debit card and you were off. Afterpay (AP) also has the option of paying in store. Before, you just had to show a barcode and you could pay off your purchase in four equal instalments. Two years ago, AP introduced Pulse Rewards, where you get discounts and offers for making on time payments.

During COVID, AP became a blue chip stock. Eventually, they were sold to Square, an American conglomerate. Aside from AP, there are other BNPL providers. Among them are Zip and Humm. These digital disruptors encourage spending sprees. There are long lists of customers who are spending above their means. While AP prides itself for being interest free, they do deduct a $7 late payment fee. If you haven’t paid in a week, another $10 is added.

The AP Bandwagon

Many stores have joined the Afterpay bandwagon. Myer offers Afterpay both in store amd online and so does Kmart. Online marketplaces like eBay and Catch likewise provide this option. In addition, shopping destinations such as The Iconic, JB Hifi, and Big W are onboard. DoorDash became AP’s first food delivery partner in Oz.

At this point, BNPL must be differentiated with cash back sites. The latter offers rebates, often with a cap, for money spent on certain stores. These usually apply to a certain category and is rarely storewide. Savvy shoppers would wait for upsized cash back promos before shelling out their bucks. Upon purchase, these rebates are then credited to buyer accounts. For this to work, the sales must be tracked.

It would usually take months before the user sees any cash back. These offers are certainly not for the impatient. Meanwhile, BNPL operate in a much different fashion. Generally speaking, you do not earn any cash back from buying with AP. You do get to pay off your buys in fortnightly instalments while enjoying those goods now. Even dentists have gone on board with AP, proving the platform’s breadth and reach.

Pay in 4

While Afterpay is a pioneer, it’s best to shop around. In 2021, PayPal Pay in 4 was launched here. While Afterpay has become almost ubiquitous, so has PayPal (PP). The company per se predates Afterpay by decades. Elon Musk, the visionary tech mogul, introduced PayPal to the world. Since then, PP has endured as an online payment method. Like Afterpay, PP is US-owned. Their call centre though is based in the Philippines. Every week, I make quite a few transactions with PP: for food delivery, groceries, paying bills, or online purchases. I love it when it says ‘pre-approved’. You don’t usually get that with other platforms.

I’ve used AP to purchase big ticket items such as Macs. I’ve paid off a few winter jackets by AP, including a down hoodie earlier this year. In terms of tech and kitchenware, I bought an HP printer from Kmart using AP. I grabbed an air fryer off eBay and a nonstick rice cooker from Myer. I’ve also nabbed branded shoes and accessories from The Iconic and two pairs from Hype DC. I got my Mont Blanc scent by Afterpaying it. Too easy.

Shopping Spree

Speaking of PP, this year, I’ve only started paying in 4. I’ve made multiple orders from Menulog, eBay, Myer, and Kmart. I’ve also purchased some IKEA homewares. At the moment, I’ve got quite a few active orders. These include an Adidas pair from Hype DC, a supplies order from Officeworks, Country Road slippers, Kmart clothing, and Menulog orders. When making orders, reading the fine print is important. Before you jump the shark, ensure that you first peruse the store’s returns policy. PayPal also claims to be interest free, with no late charges. Unfortunately, Pay in 4 isn’t available yet in store. However, it does have a huge online presence.

Zeitgeist

These digital disruptors are a sign of the times. Until six years ago, people were almost exclusively using their debit and credit cards to make both online and in store purchases. They utilised these cards for gas, groceries, night outs, and online purchases. Now? They’re old school. Cash? Like the TV ad says, it makes you look like a caveman. I’m not discounting the convenience of the latter. It’s good for most instances, but keep in mind that not all merchants accept cash. To be safe, you must have a Plan B.

Enter Afterpay in 2017. They totes realigned the planets. No more fishing around your pockets as you pay at Woolies. No more mental blocks while trying to book at the cinemas. No more counting cash at Myer to see if your $$ will cover those Koala PJs. Your phone is all you’ll ever need. Thus, human financial history could be split into two timelines. The pre-Afterpay era and the post-Afterpay epoch. The former, as noted, drew heavily on one’s credit history and bulging pockets. The latter is all about your AP transactions and, as with PP, your bank balance. Credit cards and cash dominate the former. Meanwhile, net worth and on time payments make the latter.

Post-Afterpay, both PP and AP are attractive options. Afterpay is more flexible but PP is near ecumenical in scope. Definitely, the latter has a wider reach. Some may find that cash back sites are a better fit. Ultimately, the final decision is up to the buyer.