BNPL sector to be regulated under credit laws

Financial services minister Stephen Jones says government will also move to regulate cryptocurrency exchanges like other financial markets.

The new financial services minister, Stephen Jones, says the Albanese government will push ahead with plans to bring buy now, pay later (BNPL) operators such as Zip and Afterpay under credit laws, in a further blow to the embattled sector.

He said the government would fill an empty commissioner seat at the Australian Securities and Investments Commission left by the departure last Thursday of Cathie Armour, who was responsible for the oversight of markets including the stock exchange.

And it will move to overhaul benchmarks used by the Australian Prudential Regulation Authority to measure the performance of superannuation funds after allegations they gave a leg up to underperforming funds run by the for-profit sector.

BNPL operators are currently exempt from laws designed to protect borrowers who use products such as credit cards or personal loans, because the product they offer is technically not credit.

The sector has opposed regulation, saying it has put in place an industry code of conduct.

While the sector was at one time a sharemarket darling, in more recent times stock prices have crashed because profits have largely proved elusive amid fears that bigger operators, including banks and tech companies, are moving in on the market.

The share price of leading Australian BNPL group Zip fell by more than 14% on Tuesday on news that Apple is to offer its own BNPL product.

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