New Zealanders paid nearly $20 million in Afterpay late fees last year. Consumer advocates say regulatory changes introduced in late 2024 weakened fee protections and created a structure where BNPL providers can charge amounts that don't reflect the actual cost of a missed payment.
Buy-now-pay-later services market themselves as interest-free ways to spread the cost of purchases. The reality, according to new data, is that New Zealanders paid nearly $20 million in late fees to Afterpay alone last year — and consumer advocates say the regulatory framework governing these fees is structurally inadequate.
Afterpay's results for the year to December show it made $19.7 million in late fee income in 2025, up from $18.5 million the year before. The figures were reported by RNZ, based on the company's disclosed financial results. The fees are charged when an instalment is missed: for orders up to $40, a one-time late fee of up to 25 percent of the total; for larger orders, a $10 fee on the missed payment, with a further $7 charged after seven days if the payment remains outstanding. The maximum is capped at 25 percent of the total borrowed or $68, whichever is lower.
What the 2024 reforms changed — and what they didn't fix
Buy-now-pay-later services were brought under the Credit Contracts and Consumer Finance Act (CCCFA) in September 2024, a move designed to strengthen consumer protections. But Consumer NZ argues the reforms created a significant gap.
From November 2024, BNPL providers became exempt from section 41 of the CCCFA — the rule that prohibits unreasonable fees — and section 44A, which requires default fees to reflect actual costs. Consumer NZ's Gemma Rasmussen said those exemptions mean "late fees no longer need to reflect the true cost incurred, multiple late fees can apply simultaneously across different purchases, and fee protections are weaker than those that apply to other consumer credit products."
The structural problem, according to Consumer NZ's earlier research, is that over-commitment and financial hardship were the central concerns before the reforms — and those concerns persist. Hardship cases involving BNPL continue to rise, and BNPL use for essentials and alcohol remains widespread.
The debt treadmill risk
Financial Capability Agency (Fincap) spokesperson Jake Lilley described the dynamic as a debt treadmill: "When someone ends up paying a late fee on already used essentials like petrol or food they end up even further behind trying to access essentials in the future. It risks a debt treadmill that just keeps accelerating."
Financial mentors working with Fincap are reporting that difficulty paying back BNPL lenders is adding pressure for the whānau they support — particularly people already under financial stress.
The scale of the BNPL sector
Afterpay's $19.7 million in late fees is for a single provider. The broader BNPL sector includes multiple providers, and the total amount New Zealanders pay in late fees across all providers is likely substantially higher. Arrears data from Centrix for April showed that for the sector overall, arrears improved to 8.8 percent — ending a run of monthly increases — but that figure still represents a meaningful portion of BNPL borrowers behind on payments.
For context, a $10 late fee on a missed $50 instalment represents a 20 percent charge on a payment that was likely only a few days overdue. The question regulators have not resolved is whether that $10 reflects the actual cost to Afterpay of processing a missed payment — or whether it is largely profit.
Where the regulatory debate goes from here
Consumer NZ and Fincap are both calling for the exemptions to be removed, arguing that BNPL consumers should have the same fee protection as other credit borrowers. The counter-argument from BNPL providers is typically that their model is not credit in the traditional sense — users are not borrowing money, they are paying for goods on a schedule they agreed to.
But the $19.7 million in late fees collected by one provider alone suggests the fee structure is doing significant financial harm at scale. Whether that harm is addressed depends on whether the government of the day treats it as a priority — and whether the companies involved face sufficient public and political pressure to change their practices before another regulatory update.
This article is for general information only and is not personalised financial advice. Seek advice from a licensed financial adviser (registered on the FSPR) for guidance specific to your situation.