'Buy now, pay later' option to be offered at childcare centres across the country
By Carolyn Tate|
Parents at more than 10,000 childcare centres across the county now have access to an alternative way to pay their fees thanks to the introduction of a 'buy now, pay later' option.
The initiative promises to help parents spread the cost of childcare over time, helping to relieve the financial burden of paying fees upfront. It will be offered at childcare centres across Australia and New Zealand that use Xplor Technologies billing systems, using 'buy now, pay later' service Zip.
A recent Victoria University study found that childcare is 'unaffordable' for 40 per cent of Australian families right now, and buy now, pay later services are at peak popularity, with six million people using one in Australia and New Zealand last year. Marrying the two together was always a matter of time.
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Mark Woodland, CEO of Education at Xplor Technologies says the scheme will give families the ability to be more flexible in the short term.
"[It] will empower families to have greater control of their financial situation, removing the need to involve the centre or ask for a payment plan," he told 9Honey Parenting.
"We know there is demand for tailored payment options in the Australian market, and believe this innovative initiative will improve access to childcare for more families."
Colin Baines, commercial director at Zip says the repayments are flexible, making it easier for parents to adapt to changes.
"The Zip repayment model isn't an instalment product, hence being suitable for ongoing purchases," he says. "It allows the consumer to transact as they please offering flexibility in how a consumer repays (weeks/months) to suit their needs instead of a rigid fortnightly or weekly payment structure."
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But before parents sign on the dotted line, they are warned to carefully consider what the payment option will mean for their family.
Independent financial adviser Jacie Taylor says that although 'buy now, pay later' arrangements can be tempting, there are some factors parents should keep in mind before entering into any agreements.
Ms Taylor says people should be able to answer yes to the below two questions before entering any 'buy now, pay later' agreements:
- Do you absolutely need (not want) the product or service now and cannot delay receipt until you have the available?cash?
- Will be able to meet the regular payments as they fall due?
Taylor says it's important to understand how your situation will be different in the future, allowing you to make the payments.
"A parent returning to work might find BNPL childcare a wonderful thing, because their kids could need to be in childcare from day one of their new job, but it could be a while before the first pay cheque comes in," she says.
"Therefore having extra time to pay the new household expense could be a blessing, but it would generally be advisable to try and only use BNPL as a short-term solution for temporary cashflow issues."
If entering into any 'buy now, pay later agreement', Ms Taylor says it's important to clearly understand the terms, and the penalties if you're unable to meet them for any reason down the track.
"Have a plan in place for how and when you will use it and when you will stop," she said. "If you are under constant or severe financial stress it would probably be worth seeing a financial counsellor."
Ms Taylor also suggests parents visiting the Money Smart website for advice on a range of financial matters.
