Cash-strapped consumers use buy now, pay later schemes for beauty treatments and tattoo removal

CASH-strapped Australian consumers desperate for tattoos, cosmetic procedures and laser treatments are turning to buy now, pay later schemes to fund their vanity.

CASH-strapped consumers desperate for tattoos, tattoo removal, laser, and skin procedures are turning to buy now, pay later schemes to fund their vanity and passions.

Shoppers are pumping billions of dollars a year into popular delayed payment services including Zippay and Afterpay — most commonly used in the retail industry — and now consumers can extend this to beauty procedures.

Zippay, the interest-free payment scheme, allows customers to sign up and pay for services at a later date including for tattooing and tattoo removal and certain cosmetic procedures up to the value of $1000.

But consumer group Choice’s spokesman Tom Godfrey has slammed the ability for consumers to put yet another expense on delayed payment schemes.

“If you can’t afford to buy a cosmetic procedure, locking yourself into another credit product could see you injecting yourself into a world of financial pain,’’ he said.

“We’d urge caution with these buy now pay later financial products.”

Unlike credit cards which attract hefty interest charges, these schemes charge customers fees if they fail to make scheduled repayments or pay off money owing in full by a certain date.

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Customers are using buy now, pay later schemes to fund beauty treatments.

Australian Skin Clinics’ marketing manager Ruya Hudleston said there’s an increased demand by customers to pay for services at a later date.

“The people that use it (Zippay) use it to get through to payday,’’ she said.

“It’s becoming very widespread, people were asking us before we had it if we were getting Zippay.”

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But Zippay founder Peter Gray said strict credit checks on customers were completed before they become eligible to use their scheme.

“As a responsible lender all applications are subject to a full ID and credit analysis ... to ensure our products are suitable and appropriate for all our customers,’’ he said.

“As a result we decline a high number of applications.”

Tattoos can be expensive and some customers are having to pay for their body art using Zippay.

The Brow Society’s Rebecca Dimitrov who specialises in eyebrow tattoos said the number of customers using Zippay had soared for her services that usually cost around $550.

“A lot of people are using Zippay, they don’t have $500 just sitting around ready to go,’’ she said.

“Sometimes they probably don’t have the funds really to do it.”

In the March quarter Zip Co had more than $136.1 million in transaction volumes — they recently signed up low-cost carrier Tigerair to allow customers to pay for flights using their service.

Rival payments platform Afterpay turns over $2.4 billion in sales annually and continues to boom — it has more than 14,000 retailers on its platform and more than 1.8 million customers.

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AFTERPAY

— No credit checks.

— Eight weeks to repay in fortnightly instalments.

— No account fees.

— $10 for failed auto payments.

— $7 late fee if payment still not made.

— Linked to existing credit or debit account.

ZIPPAY

— Credit checks.

— Up to 60 days for free.

— $40 minimum monthly repayments.

— $6 monthly fee if monthly balances not paid off in full.

— If the minimum repayment amount is not paid within your account 21 days after the due date a $5 late fee will be charged.