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BNPL firm Pay It Later faces wind-up order, as SMEs claim bills unpaid

(Source: Bigstock)

A group of small business owners have accused Australian buy now, pay later firm Pay It Later of withholding hundreds of thousands of dollars in sales revenue, drawing attention to the practices of smaller operators in the booming fintech sector.

Speaking to Nine’s A Current Affair, Vasile Opris, proprietor of X-Force Tactical, alleged his company had processed more than $850,000 in sales through Pay It Later.

However, Opris claimed the firm is yet to pay his gel blaster business a dollar of that revenue. Colin Corcoran, owner of Command Elite Hobbies, told a similar story, alleging his firm is owed $170,000.

Those claims of non-payment come amid reports of a legal battle over the direction of Pay It Later.

A Current Affair reports co-owners Donald Graham and Thomas Hegarty are engaged in a legal dispute over the company’s future, with Hegarty petitioning the Federal Court to dissolve the firm.

ASIC records show Hegarty filed a request to wind up the company in early April. Hegarty turned down requests for comment from Nine reporters, saying the matter was before the courts.

Founded in 2018, Pay It Later claims to have hundreds of retailers signed up to its service. The vast majority listed on its website are small businesses, with no major chains signed up to the service.

Details listed on the company website suggest it operates similarly to other BNPL providers, including homegrown giants Afterpay and Zip.

Buyers are encouraged to process orders through Pay It Later-enabled web stores, paying nothing upfront. The value of their orders is repayable over six weeks, with Pay It Later charging a $10 fee when payments are more than 24 hours overdue.

The company offers “on-the-spot credit approvals” and “instant approvals” with “no long forms”, like other BNPL competitors which operate outside of traditional credit regulation.

Pay It Later claims to pay merchants the value of those orders within a week.

“Overnight, we reconcile orders for the day and make FULL payment (minus charges) to your account within 7 days,” the company website claims.

Payments made through the system attract a merchant fee of 5.9% and a flat transaction fee of $1.90.

Pay It Later claims to make payments directly into merchant bank accounts, instead of through an internal user portal.

“We pride ourselves on this process, as one of the few buy now pay later companies that offer this,” the company states.

Further details of the company’s operations may be made public from May 4, when the wind-up request will be considered in Federal Court.

This article was originally published by Smart Company.

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