Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act 2024 (138 of 2024)
Schedule 2 Buy now, pay later
Part 1 Extending the application of the National Consumer Credit Protection Act 2009
National Consumer Credit Protection Act 2009
5 After Part 1 of the National Credit Code
Insert:
Part 1A - Extending the application of this Code
13B Application of this Code to buy now pay later contracts
Application of this Code apart from this section
(1) This Code applies to the provision of credit under a buy now pay later contract (and to the buy now pay later contract and related matters) if, apart from this section, the Code applies to the provision of credit under the buy now pay later contract (and to the buy now pay later contract and related matters).
Note: For when this Code applies in relation to a buy now pay later contract apart from this section, see sections 5, 6 and 13C. Section 13C deals with low cost credit contracts, including low cost credit contracts that are buy now pay later contracts.
Extending the application of this Code
(2) In addition, this Code applies to the provision of credit under a buy now pay later contract (and to the buy now pay later contract and related matters) if:
(a) the credit provider, or the debtor, under the buy now pay later contractis a constitutional corporation; and
(b) this Code would, apart from this section, apply to the provision of credit under the buy now pay later contract (and to the buy now pay later contract and related matters) if the following were disregarded:
(i) paragraph 5(1)(c) (which requires charges to be made for the provision of credit);
(ii) subsection 6(1) (which excludes the provision of certain kinds of short term credit);
(iii) subsection 6(5) (which excludes the provision of credit for which only account charges are payable).
(3) If this Code applies to the provision of credit under a buy now pay later contract (and to the buy now pay later contract and related matters) under subsection (2), then:
(a) this Code applies in relation to all transactions or acts under the contract whether or not they take place in this jurisdiction; and
(b) this Code continues to apply even if the credit provider ceases to carry on a business in this jurisdiction.
13C Application of this Code to low cost credit contracts
Application of this Code apart from this section
(1) This Code applies to the provision of credit under a low cost credit contract (and to the low cost credit contract and related matters) if, apart from this section, the Code applies to the provision of credit under the low cost credit contract (and to the low cost credit contract and related matters).
Note: For when this Code applies in relation to a low cost credit contract apart from this section, see sections 5, 6 and 13B. Section 13B deals with buy now pay later contracts, including buy now pay later contracts that are low cost credit contracts.
Extending the application of this Code
(2) In addition, this Code applies to the provision of credit under a low cost credit contract (and to the low cost credit contract and related matters) if:
(a) the credit provider, or the debtor, under the low cost credit contract is a constitutional corporation; and
(b) this Code would, apart from this section, apply to the provision of credit under the low cost credit contract (and to the low cost credit contract and related matters) if the following were disregarded:
(i) paragraph 5(1)(c) (which requires charges to be made for the provision of credit);
(ii) subsection 6(1) (which excludes the provision of certain kinds of short term credit);
(iii) subsection 6(5) (which excludes the provision of credit for which only account charges are payable);
(iv) subsection 6(13) (which allows the regulations to exclude a provision of credit) and any exclusions made under that subsection;
(v) subsections 6(14) and (17) (which allow ASIC to exclude a provision of credit) and any exclusions made under those subsections.
(3) If this Code applies to the provision of credit under a low cost credit contract (and to the low cost credit contract and related matters) under subsection (2), then:
(a) this Code applies in relation to all transactions or acts under the contract whether or not they take place in this jurisdiction; and
(b) this Code continues to apply even if the credit provider ceases to carry on a business in this jurisdiction.
13D Meaning of buy now pay later arrangement and buy now pay later contract
Buy now pay later arrangement
(1) A buy now pay later arrangement is an arrangement or a series of arrangements:
(a) under which a person (the merchant ) supplies goods or services to a consumer (within the meaning of the National Credit Act); and
(b) under which a third person (the BNPL provider ) directly or indirectly pays the merchant an amount that is some or all of the price for the supply mentioned in paragraph (a); and
(c) that includes a contract between the BNPL provider and the consumer under which the BNPL provider provides credit to the consumer in connection with the supply mentioned in paragraph (a).
(2) However, an arrangement or a series of arrangements of the kind described in subsection (1) is not a buy now pay later arrangement if the arrangement or series of arrangements is of a kind prescribed by the regulations for the purposes of this subsection.
(3) For the purposes of subsection (1), and to avoid doubt:
(a) it does not matter whether any fees or charges are payable by the consumer or the merchant in connection with the arrangement or series of arrangements; and
(b) it does not matter whether the payment by the BNPL provider mentioned in paragraph (1)(b) occurs before, at or after the time when the goods or services are supplied by the merchant to the consumer as mentioned in paragraph (1)(a); and
(c) it does not matter whether the contract mentioned in paragraph (1)(c) is a continuing credit contract; and
(d) it is not necessary for the arrangement or series of arrangements to include any contract to which the merchant, the consumer and the BNPL provider are all parties.
Buy now pay later contract
(4) A contract is a buy now pay later contract if:
(a) it is part of a buy now pay later arrangement; and
(b) it is a contract of the kind mentioned in paragraph (1)(c).
13E Meaning of low cost credit contract
(1) A contract is a low cost credit contract if:
(a) credit is, or may be, provided under the contract; and
(b) the contract is:
(i) a buy now pay later contract; or
(ii) a contract prescribed by the regulations for the purposes of this subparagraph; and
(c) the period during which credit is, or may be, provided under the contract is no longer than the period (if any) prescribed by the regulations for the purposes of this paragraph; and
(d) the contract satisfies any requirements prescribed by the regulations for the purposes of this paragraph that relate to fees or charges that are, or may be, payable under the contract; and
(e) the contract satisfies any other requirements prescribed by the regulations for the purposes of this paragraph.
Fees and charges
(2) To avoid doubt, regulations made for the purposes of paragraph (1)(d) may prescribe that a specified fee or charge, or a fee or charge of a specified kind, must, or must not, be payable under the contract.
(3) For the purposes of this section, fees or charges:
(a) include a charge referred to in paragraph (a) of the definition of credit fees and charges in subsection 204(1); and
(b) do not include a fee, charge, duty or expense referred to in paragraph (b), (c) or (d) of that definition.