Afterpay, a buy-now-pay-later app. Photo: Afterpay
It's too easy to buy alcohol using buy-now-pay-later (BNPL) services, the Salvation Army says.
It wants regulatory reform to stop BNPL being used to pay for alcohol.
BNPL allows people to purchase items with a small or no upfront cost, and pay off the amount over time.
Salvation Army social policy spokesperson Ana Ika said it was increasingly being offered by online delivery services - as well as some supermarkets and bottle stores.
"It's limited to about 20 or so merchants that have alcohol but because of things like rapid delivery, DoorDash and Gimme, which circumvent the availability of alcohol - although [BNPL] is not necessarily available in the physical store if you purchase it on DoorDash after buying a DoorDash voucher, that bypasses having BNPL available at the store."
She said the use of BNPL on these delivery services increased affordability of alcohol, advertising of it, access to it and the availability of it.
"The majority of off licenses are located in high deprivation communities... We know because we're in the financial mentoring space that a lot of families get caught out in debt to BNPL."
Ika said some people lacked the financial literacy to understand that if they were told they only had to pay $10 upfront, they could still have three more payments of that amount due in the coming weeks.
Bonnie Robinson, director of the Salvation Army social policy and parliamentary unit, said BNPL was promoted as a flexible option but it often led to unmanageable debt.
"When alcohol is added to the mix, especially in communities already vulnerable to alcohol-related harm, the risks multiply. We're deeply concerned about the direction this is heading."
The Salvation Army wants the Government to prohibit BNPL for alcohol purchases, strengthen local alcohol policies (LAPs) to include BNPL restrictions and fully regulate BNPL under the Credit Contracts and Consumer Finance Act.
"Deferred payment should not apply to a product that causes $9 billion in social harm each year," Robinson said. "We need to act now to prevent BNPL from becoming the new normal in alcohol retail."
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