Afterpay is an Australian fintech company that offers BNPL services in Australia, Canada, the US, New Zealand and the EU. The platform allows you to make purchases and pay in 4 fortnightly instalments, i.e., you make your first payment immediately when making the purchase, and the other three every other week, all of it interest-free. If you always pay on time, the service will be completely free. Additionally, signing up for Afterpay or even defaulting on your loan doesn't affect your credit score.
The only downside is that you have to make the first payment right away and that you'll be paying as much as $17 in fees if you miss your payment and don't pay what you owe in less than a week.
What is Afterpay?
Afterpay is a popular Australia-based fintech company which offers buy-now-pay-later (BNPL) services to its customers. Founded in 2014 in Sydney, Australia, the company provides its services across Australia, Canada, the US, New Zealand and the EU. Presently, the platform has over 20 million global users and 144,000 merchants and offers its services in 9 locations worldwide. According to Afterpay, the platform seeks to help people spend responsibly without incurring fees, interest and debt.
How Does Afterpay Work?
Like most BNPL platforms, Afterpay is free to use and aims to help people get what they want and need by offering zero-interest loans with payments in four installments for online and in-store purchases. Afterpay offers a simple financial solution by allowing users to make cashless purchases online or in-store and pay later in four installments with zero interest.
The first installment is paid immediately after the purchase, while the remaining three installments are made biweekly (fortnightly) for the next six weeks. The company offers a business model that is completely free for customers who pay on time, but late payments incur a fee.
Features Of Afterpay Canada
#1 Immediate Approval
Afterpay approves sign-ups immediately and, unlike other BNPL platforms, does not carry out credit checks on its users. This makes the sign-up process easy, quick and simple. The lack of a waiting period enables customers to get on with their shopping immediately. To register for Afterpay, you only need to input your name, email address, home address, phone number, date of birth and your preferred payment method (either your debit card or your credit card).
Lower spending limits are approved for new users. Over time, the limit is gradually increased depending on your early payments and how frequently you use the platform.
The platform also approves orders very fast, making it very reliable in cases of emergency, and they approve nine customer purchases out of ten.
#2 Mobile App
The Afterpay app is available for both iOS and Android devices. It has a 4.8 rating out of 5 on Google Play Store and is also available on the App Store. You can use the Afterpay app for both in-store and online shopping.
If you're shopping online at any retail store that accepts Afterpay as a payment option, you can use the app to generate a virtual Afterpay card at checkout. In the same vein, if you're shopping in-store, you can download the app, generate the virtual Afterpay card and use it to pay for your purchases.
This feature helps users save time and makes Afterpay a reliable option when you are low on cash.
Related: You may be interested in Chime, an online checking account with a free debit card.
#3 Ease Of Use
Users can access Afterpay through the app, on the website, or directly through the merchant. Furthermore, due to the emergence of Afterpay in Quebec, the fintech has made the platform available in both English and French.
Also, the platform has a user-friendly interface and is easy to navigate. It also provides useful resources to both the merchants and the customers.
#4 Flexible Repayment Schedule
Like other BNPL platforms like PayBright and Klarna, Afterpay offers its users a flexible loan repayment system by splitting the amount owed into four installments. You pay the first installment immediately and the others biweekly or fortnightly for six weeks.
This feature enables users who are low on cash to shop in-store or online at their favourite retail stores partnering with Afterpay while paying at a later date. This payment system also allows customers to pay for their purchases in smaller installments than they otherwise would if it were in bulk.
Afterpay also has a ‘part-payment' feature which allows users who cannot pay the total installment amount to pay in part and complete the payment later.
Its flexible payment system also includes the Afterpay Hardship Policy, which includes a provision for customers who cannot pay their loans due to unemployment or any other situation. If that happens to you, you just have to contact Afterpay customer service to get a personalized solution.
#5 Interest-free Repayments
Contrary to using a credit card, and like most similar platforms, Afterpay allows you to pay back your loans at 0% interest. This is the main reason why people prefer using BNPL platforms like Afterpay to using their credit cards. A 0% interest rate means you can buy whatever you want from any of Afterpay's partnering merchants, paying only a small fraction of the total cost and paying back the rest of the exact amount later with no additional charges.
Compared to a credit card, which you have to pay in full before your monthly billing cycle ends, with Afterpay, you get two extra weeks of an interest-free loan.
#6 Availability Of Payment Options
Afterpay allows you to choose the payment option best suited to your needs and offers both automatic and manual payment methods. You need to add enough funds to your card to use the automatic payment option. The amount owed to Afterpay will be automatically deducted from your card when it is due. You can also use the manual payment option to repay your loans by choosing one payment provider from the options on the website.
#7 Merchant Stores
Afterpay partners with over 144,000 retail stores across Canada, Australia, the UK, the US and New Zealand. It has various partner merchants in different categories, such as:
- Jewellery and accessories
- Fitness and wellness
In Canada, some popular retail stores it partners with include:
|Canada mats||Fit Affinity|
|Pandora||Bed Bath & Beyond|
These partnerships ensure that Afterpay users have many retail stores to choose from.
Pros And Cons Of Afterpay Canada
- It has no impact on your credit score as it does not report to credit bureaus
- Allows users to purchase items without cash
- Charges no interest on purchases
- Incurs no fees when you pay on time
- Has a variety of retail stores to choose from
- Reminds you to pay on time
- Flexible payment system made in four installments
- Requires instant payment of the first installment
- A low spending limit for new users prevents them from making large purchases
- Late installment payments attract a fee charge of $10, and if you don't pay within seven days of the due date, Afterpay charges an additional fee of $7
Afterpay Canada is free only if you make your payments on time. There are no upfront fees, interest charges or hidden costs.
You'll have to pay a $10 fee if you don't pay on time and an additional $7 if you do not pay within seven days of the due date.
The platform offers only one product which is a 6-week financing option in four installments to be paid every two weeks after you have paid the first installment.
Incorrect processing of your payment system could result in late fees, in which case you would have to log into the system to change your payment method before the payment is due.
Afterpay's refund policy largely depends on the refund policy, if any, of its partner retail stores. So, should you have to return an item, the retail store from which you bought the item will be responsible for the refund.
Klarna Vs Afterpay Canada
Like Afterpay, Klarna is a buy-now-pay-later (BNPL) service provider. Klarna and Afterpay are similar in many ways. Both fintechs offer their services of interest-free payments on purchases across Canada. Both companies also allow their users to repay their loans in four installments.
|Interest rate||None||None except you chose the 30 days or 6 months plan.|
|Credit check||Does not carry out credit checks on users.||Carries out soft credit checks.|
|Late fees||Charges late fees of $10 and an additional $7 if payment is not made within seven days of the due date.||Charges late fees of $7.|
|Loan repayment||Insists on a down payment of the first installment.||Flexible loan repayment system.|
|Other financing options||None||Also offers 30 days and 6 months financing options.|
The key differences between the two fintechs lie in their late fees, their interest rates, their loan repayment plan and their financing options.
The Bottom Line
Afterpay Canada is an easy and fair way to pay for your items, especially if you're low on cash. Because there are no credit checks and interest charges, it is a suitable option for those confident that they can make their payments on time to avoid late fees. The spending limit also increases over time as long as you keep using the platform and pay on time. Click the button below to learn more about Afterpay.
Afterpay Canada FAQs
Is Afterpay available in Canada?
Yes, Afterpay is available in Canada and partners with some of the more popular brands in the country.
Can I use Afterpay on Amazon?
No. Presently, Amazon does not accept Afterpay as a payment option for purchases. However, Afterpay offers a virtual Afterpay card that you can use just as you would a regular credit card to purchase your items from Amazon.
You will still have to pay back Afterpay in installments every two weeks for six weeks after making a down payment of the first installment immediately after purchase.
Amazon does not recognize this card as anything but a regular credit card. So, this loophole allows you to purchase goods from Amazon with Afterpay.
How many orders can I make on Afterpay?
You can only make one order per day. Making multiple orders in a day is a red flag and might lead to your account being suspended.
Is Afterpay legit and trustworthy?
Afterpay is trusted worldwide by over 20 million people and partners with over 144,000 merchants. The platform has a 4.9 rating out of five on Trustpilot, a 4.9 rating out of five on the App Store and 4.8 stars out of five on the Google Play store.
Also, Afterpay is a PCI DSS Level 1 licensed Service Provider. Hence, your personal details are stored and protected in accordance with the Payment Card Industry Security Standards.
Does Afterpay affect your credit score in Canada?
Afterpay does not affect your credit score because it does not carry out credit checks and does not report defaults to credit bureaus.
Why is my Afterpay limit so low?
New Afterpay users have a spending limit which may be low. Also, your spending limit is reduced if you make late payments. Afterpay might even suspend your account indefinitely if you cannot pay back for an extended period.
Can I pay off my Afterpay loan in less than the full installment amount?
Yes, you can. Afterpay has a “part payment” feature which allows you to pay less than the full installment amount. You just need to log in to your Afterpay account, go to the ‘Payment Schedule' section, click on the ‘Make Payment' option then enter the amount you want to pay.
How do I get an Afterpay card in Canada?
You just have to download the Afterpay app from the Google Play store or from the App store. Go to the ‘Card' option to generate your Afterpay card and follow the instructions to add it to your digital wallet.
How do I get approved on Afterpay?
To get approved on Afterpay, you have to meet its requirements.
You should be at least 18 years of age and own a valid debit or credit card linked to your bank account, phone number, name and email address with enough funds to cover the first installment payment.
Why was my order with Afterpay declined?
Generally, Afterpay approves 90% of all orders. However, certain factors may cause your order to be declined. Factors like the length of time you have been using the platform, the amount of funds in your credit or debit card, outstanding debts and your payment history.
The value of your order might also cause it to be declined, together with making multiple orders when you're ineligible to do so.
Furthermore, the terms and conditions of the merchant stores might also play a part in your order being declined.