Afterpay Touch Group Ltd (ASX: APT) has launched a defence of itself in the face of an impending Senate inquiry.
Afterpay is a popular buy now, pay later provider that is expanding to the United States and the United Kingdom.
Yesterday, the share price fell 18% in response to the news report.
What Afterpay said:
Afterpay welcomed the chance to participate in a review of the industry and is supportive of appropriate regulation.
But, it argued that it offers a differentiated service to its competitors. It said that its service is free if customers pay on time and it doesn’t charge interest or monthly fees. If payments aren’t made on time that account is suspended.
Afterpay pointed to the New Zealand Government recognised Afterpay’s model is different to traditional credit and recently decided not to include products like Afterpay under local credit regulations.
Answering some accusations of it being financially unhealthy for consumers it said: “The overwhelming majority of consumers pay on time and have never incurred a late fee.”
The company said that its late fees are capped, minimal and in total are lower than the costs Afterpay incurs if consumers don’t pay on time. Afterpay argued it’s better for the company to promote responsible use and discourage late payments.
Afterpay concluded that it’s an Aussie-made innovator which provides better alternatives to traditional credit products and it’s also a budgeting tools that aligns with their values.
Investors appear to be shrugging off yesterday’s news as the Afterpay share price is up 12% so far this morning.
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