Afterpay and Zip find their Way Forward to help Australians out of financial hardship

  • By Zilla Efrat

Afterpay and Zip Co have become the first Buy Now, Pay Later (BNPL) companies to sign up with the Australian debt solutions charity, Way Forward.

They join a list of members that includes Australia’s biggest financial institutions and which are cooperating with Way Forward to help Australians in financial hardship.

According to Way Forward CEO David Berry, the BNPL revolution has completely altered how millions of Aussies pay and think about budgeting.

“But this dizzyingly rapid pace of change means education and industry cooperation must continue,” he says.

“At Way Forward, we help more than 600 Australians reach long-term, dignified pathways towards a debt-free life. Looking at our data, we expect client numbers, amounts of debt and creditors to continue to rise as we open up our economy. During this time, industry cooperation across traditional institutions and fintech innovators will become more important than ever.”

Afterpay co-founder and co-CEO Anthony Eisen says: “Financial hardship is complex, stressful and unique to every individual’s circumstance so working with their team of hardship advocates will truly complement the services we already offer to our Australian customers.”

Eisen adds that the average purchase on Afterpay is around $150 and the average amount that customers have outstanding is around $200.

“For customers who do need additional support, Afterpay offers a generous and accessible hardship program where flexible payment timelines with no additional fees or cost can be agreed upon,” he says.

“Furthermore, Afterpay does not rely on customers to drive revenue, as most of our revenue comes from merchants.”

Similarly, Zip Co Australia’s chief operating officer Chris Patrick says Zip has always operated in a fair and responsible way, putting the customer at the centre of everything it does.

“We conduct credit and ID checks on all customers upfront but also recognise that people’s situations can change,” he says.

“So, if someone finds themselves in financial difficulty, we want to know about it and help them get through it.”

Patrick notes that while Zip offers financial hardship assistance programs to a small number of customers each month, it also recognises that often people need help with a number of debts and independent advice. “That’s where Way Forward can play a significant role in helping people get back on track,” he adds.

Way Forward, a small not-for-profit organisation, has a dedicated team of hardship advocates who have typically worked for financial institutions or as financial counsellors and have dealt extensively with creditors by negotiating better outcomes for clients.

Way Forward was formed in 2018 and has the backing of the big four Australian banks, the Australian Bankers Association and the consumer movement led by the Financial Counselling Australia.