Afterpay is a popular “buy now, pay later” payment service in Canada that allows customers to make purchases at participating online and in-store retailers and pay for them in interest-free instalments.
If you’re looking to buy something but don’t have the cash, and need a convenient payment option that lets you shop now and pay later, Afterpay is a great alternative to traditional credit cards, especially for those who want more control over their finances.
In this Afterpay Canada review, we’ll take a close look at this popular “buy now, pay later” service. We will explore the features and benefits of Afterpay Canada, assess whether it is a worthwhile option for Canadian consumers, and compare it with other payment services available in Canada.
About Afterpay
Afterpay is an Australian-based fintech company offering buy-now-pay-later (BNPL) services across Australia, the UK, the US, and New Zealand and recently opened to consumers in Canada.
Founded in 2014, Afterpay is based in Sydney and has over 1300 employees, over 75,000 partners and over 13 million global customers. The company entered Canada in 2020 and aims to promote responsible spending by approving customized spending limits according to individuals’ spending habits.
Afterpay offers no-fee and zero-interest loans with four instalment payments on cashless purchases online or in-store. It lets you make your first instalment payment at the retailer’s point-of-sale and make the remaining three payments bi-weekly, each for 25% of the total purchase price.
How Does Afterpay Canada Work?
Afterpay works like other buy-now-pay-later (BNPL) apps in Canada, helping you break up expensive purchases into affordable chunks. They strive for the financial freedom of all their customers without regard to their current financial position and credit history.
They offer their services for free, and you don’t have to worry about additional interest rates or transaction fees.
You only need to create an account and start shopping at your favourite stores using Afterpay as your checkout payment method. The merchant will ship your goods once you check out.
However, you must make the first (25%) out of the four instalment payments at the retailer’s point of sale. The remaining three payments are due after every two weeks.
The loan is retrieved automatically through your debit or credit card on the due date. But you can pay your debt before the due date without penalty, reducing your chances of late payment fees.
The Afterpay new notification system will notify you constantly to ensure you don’t miss your due date. However, if you don’t make payments, your account will be paused to prevent further expenses.
How Does Afterpay Make Money?
Afterpay does not charge you any fees or interest when you purchase items. However, it makes money by charging a fee on transactions to the merchants that use its payment processing system.
Benefits and Downsides of Afterpay Canada
It’s essential to weigh the good and ugly sides of any BNPL app before subscribing to it. Here are the pros and cons of Afterpay that you need to know.
Pros
- Afterpay doesn’t charge interest on its pay-after-delivery loan.
- Afterpay doesn’t charge upfront fees on its loans when you pay on time.
- The Afterpay’s part payment feature allows you to pay more or less than the full instalment amount without penalty.
- Afterpay doesn’t conduct credit checks nor consider your credit score when assessing your application.
Cons
- Afterpay charges fixed late payment fees for defaulting on your payment on the due date.
- Unlike other BNPL apps, you must make the first payment (25%) out of the four instalment payments to get your order approved.
- While Afterpay aims to promote responsible spending, the starting spending limit may be insufficient for you.
- Like other pay-after-delivery apps, Afterpay doesn’t report to credit bureaus. Hence your loan payment will not improve your credit score.
Which Stores Accept Afterpay?
Afterpay partners with several stores that accept payment after delivery with no interest rate or fees. Afterpay partners with several stores across different categories, such as clothing, shoes, jewellery & accessories, beauty, fitness & wellness, etc.
However, you must visit the Afterpay page to access Canadian stores. The following are some of the top brands which Afterpay partners within Canada:
- Canada Mats
- Bed Bath & Beyond
- Stylefinity
- Luxquisite
- Isiro Canada
- Pandora
- Davanas
- Bohoo
- Nixon
- Platypus
- Saxx
- Skre Canada
- Anian MFG
- Fit Affinity
- RYU
- Bather
- Kyodan
- Underground Clothing
- The Drive Skateshop, etc.
Is Afterpay Legit and Safe?
Afterpay is a legit and safe pay-after-delivery app trusted by over 13 million global customers and over 75,000 partners.
As a PCI DSS Level 1 licensed Service Provider, Afterpay stores and protects your personal information according to the Payment Card Industry Security Standards.
Furthermore, Afterpay has a 4.9 out of 5-star rating on Trustpilot, a 4.9 out of 5-star rating on the App Store and a 4.8 out of 5-star rating on Google Playstore.
Is Afterpay Good For Your Wallet?
Since Afterpay does not require credit history checks or report payment information to credit bureaus, you should only use Afterpay if you need financing for a short period, have a bad credit score, need a financial option that requires no interest, and are prepared to pay instalments on time.
Afterpay is a good alternative to traditional credit cards in Canada and their high-interest rates, but it needs to be disciplined to avoid encouraging bad habits.
Does Afterpay Affect Your Credit Scores?
When you sign up on Afterpay, the company only runs a soft credit check, so opening an Afterpay account doesn’t affect your credit score. The company decides within seconds if you are approved and informs you immediately if you can use Afterpay as a form of payment.
New users can only spend up to a maximum of $400 to $500, and only old users with good repayment history can spend up to $2000.
However, Afterpay does not send your payment information to credit bureaus unless you miss a payment. You don’t get any benefit when you pay off your loan promptly.
What Happens If You Need Help With Your Payments?
If you cannot meet up with an upcoming instalment, Afterpay will work with you to set up a new payment plan that fits your circumstances. You can initiate a conversation with Afterpay customer service by calling 1-833-386-0210 or creating a request using the “Get in Touch” form.
Afterpay also has a helpful feature called Part Payment, which allows you to pay less than the instalment amount. To use this feature, follow these steps:
- Log into your Afterpay account.
- Click on “Payments Schedule.”
- Click on “View Order.”
- Click on the “Make a payment” button.
- On the new screen that appears, enter the amount you wish to repay and the payment schedule will be adjusted to reflect the amount you paid.
How Afterpay Compares To Other BNPL Apps in Canada
There are other buy-now-pay-later apps available to Canadians that you can consider. Some offer you better services and features compared to Afterpay. Here are a few alternatives to Afterpay.
Afterpay vs Klarna
Klarna is a popular fintech company offering pay-after-delivery services in Canada and 16 other countries. Like Afterpay, Klarna doesn’t charge interest and fees for pay-after-delivery services. However, late payment fees apply.
Klarna sets itself apart in the buy-now-pay-later (BNPL) with exclusive deals and complete pay-after-delivery services, attracting more than 90 million shoppers.
Unlike Afterpay, Klarna doesn’t require making the first instalment payments before getting approval. Instead, it allows you to make four instalments, due every two weeks.
However, Like Afterpay, you can also pay off your Klarna loan before the due date without penalty. The payment structure is the major difference between Klarna and Afterpay.
> Read more on Klarna Canada review
Afterpay vs Affirm
Affirm is a global buy-now-pay-later (BNPL) point-of-sale loan available to online and offline shoppers in Canada.
Like Afterpay, Affirm also partners with many stores in Canada that are luxury goods retailers, like clothing and home decor, and helps you spread purchase payments over time.
Affirm lets you make instalments for up to 36 months but with interest rates ranging from 10% to 30% APR, depending on your credit score.
If you can confidently make payment in four instalments, consider Afterpay. Otherwise, you can consider the Affirm app.
Final Thoughts on Afterpay Canada Review
Say goodbye to the hassle of waiting for payday to make purchases! With Afterpay Canada, you can buy what you want now and pay later in manageable instalments. This buy-now-pay-later app is taking Canada by storm, and it’s easy to see why.
Afterpay Canada offers zero-interest and no-fee loans with four instalment payments, making it an affordable alternative to credit cards. Plus, you can customise your spending limit based on your financial habits, giving you complete control over your budget.
So whether you’re shopping for fashion, home decor, or anything in between, Afterpay Canada is the perfect solution to make your purchases hassle-free and budget-friendly. And with a wide range of participating retailers, you’re sure to find what you’re looking for.
So why wait? Sign up for Afterpay Canada today and enjoy the freedom to shop now and pay later!
