Financial Services Essentials: Buy Now Pay Later Code of Conduct Update
Buy Now Pay Later (BNPL) transactions have skyrocketed in recent years, although a substantial number of consumers are missing payments. The risks & harm to consumers has led to significant regulatory changes impacting the industry & an upcoming Code of Conduct. Analyse the current environment, where ASIC stands on the situation, upcoming regulatory changes, & what the forthcoming BNPL Code means for the sector. WEB216N40
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Buy Now Pay Later Code of Conduct Update
The number of buy now pay later transactions increased from 16.8 million in the 2017-18 financial year to 32.0 million in the financial year 2018-19, representing an increase of 90%, according to ASIC’s November 2020 report.
ASIC also noted that one in five consumers are missing payments. In the 2018–19 financial year, missed payment fee revenue for all buy now pay later providers in the review totalled over $43 million, a growth of 38% compared to the previous financial year.
Buy now pay later arrangements are clearly popular as a payment method. While working for the majority of users, some consumers are suffering harm.
There are regulatory changes coming that will impact the industry, with the design and distribution obligations coming into effect in October 2021.
The industry is developing a Code of Conduct. ASIC expects the industry to work collectively to develop a code that provides good consumer outcomes across the diverse range of business models operating in the industry.
The final version of the BNPL Code of Conduct will be released shortly. Hear from the experts about what this final version of the Code looks like, what it means for the financial services and credit law sector, and how those in the industry should prepare to navigate the new legal risks and obligations.
- Background to the development of the Code
- ASIC report
- Final version
- What this means for the BNPL payments sector
Presented by Elaine Cheung, Special Counsel, Piper Alderman; Accredited Specialist in Credit Law, in conversation with Karl Turner, Chief Operating Officer, Australian Financial Industry Association and Michael Saadat, Senior Director, Public Policy & Regulatory Affairs, Afterpay
Presenters
Elaine Cheung
Elaine has extensive experience advising and acting for banking and financial services clients in a variety of areas. Her practice includes acting for and advising clients in relation to regulatory compliance and consumer credit issues, the regulation of financial products and services and financial services reform, privacy and data breaches, applications for Australian Credit Licenses and Australian Financial Services Licenses, the review of trust deeds and preparation of loan and mortgage documentation in relation to loans to SMSFs, real property financing transactions, mortgage enforcement proceedings in the Supreme Court of New South Wales, reviewing and preparing anti-money laundering and counter-terrorism financing programs and trade mark and business name issues
Karl Turner
Karl is currently Chief Operating Officer, Executive Director Policy & Risk Management for Australia’s largest financial services association, AFIA. He has been a Group Chief Risk Officer for an ASX Listed Entity with deep expertise in credit, conduct, operational and compliance risk and is a proven leader – be it turning around and / or building high performing teams. In addition, he has extensive experience in tactical and strategic advice to retail, wealth, small, medium and institutional financial services clients; is an excellent communicator and negotiator with significant accomplishments in managing a diverse group of internal and external stakeholders including Regulators and has strong problem solving capability with a focus on ensuring benefits flow to the end customer, the business and the employee.
Michael Saadat
Michael Saadat is a Senior Director, Public Policy & Regulatory Affairs at Afterpay. He was previously a Senior Executive Leader for ASIC's Deposit Takers, Credit and Insurers team. Prior to that, Michael worked as Director and Head of Compliance for Citigroup's Consumer Bank in Australia. He has also previously worked at ASIC as a senior lawyer and senior manager, and as a consultant at PricewaterhouseCoopers in London and Sydney. Michael has a Bachelor of Economics and a Bachelor of Laws (Hons) from Macquarie University, a Master of Laws from the London School of Economics, and an Executive MBA from Melbourne Business School.