Stopping retailers from passing on the cost of Afterpay to customers is a key part of its business model,some analysts said.Credit:Dominic Lorrimer
In the annual report of its Payments System Board,the RBA this week said a review next year would look at"no surcharge"rules imposed by BNPL operators.
These prevent retailers from charging customers a surcharge for paying in this way,in contrast to credit cards,where retailers are allowed to add a surcharge to cover their extra payment costs.
"BNPL services are relatively expensive for merchants to accept and they usually restrict the ability of merchants to apply a surcharge to pass on these costs to the customers that directly benefit from the service,"the RBA said.
"Accordingly,an issue for the bank is whether policy action in relation to these no-surcharge rules should be considered."
Afterpay charges retailers a fee of between 3 per cent and 7 per cent,according to analysts,but customers do not pay a fee for using the service if they pay on time.
With markets already nervous over the risks to Afterpay from regulation,its shares dropped 7.3 per cent to $29.65 on Friday,while Zip Co shares fell 6.2 per cent to $4.35.
Morningstar analyst Chanaka Gunasekera said that if merchants started to charge a surcharge for paying via Afterpay it would be a risk to the business model.