Another Aussie buy now, pay later giant CLOSES impacting hundreds of thousands of customers at JB HiFi, The Good Guys and Kogan
Popular buy now pay later service LatitudePay is closing down, impacting more than 500,000 customers.
The buy now, pay later service allowed customers to spread the purchase cost over ten weekly interest-free payments.
LatitudePay was available more than 5,000 retailers across Australia, including Kogan, JB HiFi and The Good Guys.
In an email to customers, LatitudePay said the service will no longer be available from April 11.
‘Any balances owing will continue to be debited from your debit or credit card as usual until the balance is repaid in full,’ it said.
‘Once your total amount owing has been paid in full, we will close your account. You don’t need to take any action to close.’
LatitudePay’s owner, Latitude Financial Services, says it closed the service after an extensive review.
‘Buy now pay later has achieved its aim by attracting more than half a million customers to Latitude but is an immaterial part of the business, representing approximately 0.3 per cent of receivables,’ it said.
‘Given this, and as a consequence of the uncertainty surrounding the future regulatory environment, Latitude believes now is the right time to exit the sector.
The financial services company said it remains fully supportive of regulating the buy now, pay later sector.
The closure of LatitudePay comes just a week after another buy now, pay later went under.
Openpay has entered receivership after a disastrous three months saw the company lose $18million.
Openpay’s collapse, the first of any BNPL service, will cause concern for customers of some of its retailers, Bunnings Warehouse, online marketplace Kogan.com, Officeworks, Spotlight and clothing store Glue.
Its receivers from insolvency firm McGrathNicol, are yet to confirm whether these retailers will get their money back, while customers will still have to pay off their debts in installments.
Openpay’s most recent quarterly report showed it had suffered $18.2million in operating losses, and a $38million loss over the last two quarters leaving it with just $17million in cash equivalents.
It had also failed to turn a profit since it was listed on the stock market in 2019, and its decline saw it pull its business out of the UK.
Openpay had also tried to sell its US branch as it battled financial woes.
The company had targeted customers making higher-valued transactions, including for healthcare services with Bupa Dental one of its retailers.
While running a similar service to Afterpay which is worth $14.8billion, Openpay was valued at $45.4million.