But Elana, who is one of FINSIA’s newest Senior Fellows, says that it should not inhibit innovation and recognise Afterpay’s “efforts to grow responsible lending”.
Her comments came during the AGM when Co-CEOs Anthony Eisen and Nick Molnar spoke from San Francisco and highlighted the work they are doing to engage and educate consumers about their spending habits.
The meeting comes just a few weeks before an EGM to vote on the $39 billion merger with Jack Dorsey’s Square that is the biggest M&A deal in Australia’s history.
“Regulation continues to be a core focus for the business, as the Buy Now Pay Later sector increases in global relevance,” she said.
“We continue to ensure that regulators see us as transparent, proactive, and open to engagement.
“We continue to work collaboratively to explain what we are and what we’re not as well as how the Afterpay model and its inbuilt protections work.
“It's pleasing to see that even where there is some movement in relation to regulation including recently in the UK, that the response is proportionate to the risk, supportive of innovation, and also recognises our efforts to grow responsible spending.
“Although there has been recent commentary on the narrow issue of surcharging, we look forward to engaging with the Australian Treasury as they take on a greater role in leadership of the payments system.
“We consider that the Australian Code of Conduct, which commenced in March, and the extensive work completed by a number of wide ranging reviews into the sector has established a best-in-class framework that is working as intended.
“To be clear, we are not anti-regulation but we believe regulation should be fit-for-purpose, reflective of the risk, and not stifle innovation and competition.
We look forward to working with regulators to achieve this.”
In his presentation, Anthony Eisen talked about the ways younger customers were voting with their digital wallets.
“The next generation of customers trust Afterpay because we enable them to spend their own money on the things they want, with full transparency of their financial position, and without the fear of entering revolving debt or exorbitant interest,” he said.
“Ninety per cent of our Australian customers state that Afterpay helps them with budgeting.
“And during the last 12 months, these same customers saved more than $110 million in credit card fees by using Afterpay instead of a credit card.
“It’s no surprise that one million credit cards were cancelled in Australia in the last year alone as more and more people use Afterpay to get rid of debt and improve their financial wellbeing.”
InFinance looked at the issue of regulation in the BNPL sector earlier this year on the eve of the release of the Australian Finance Industry Association’s code of conduct.
The code ensured that Afterpay, Zip, Openpay, Klarna, Humm, Latitude, Payright, and Brighte placed a cap on late payment fees and lifted age restrictions to 18
Read more: Debate - Risk and reward in the buy now, pay later sector