What is Afterpay?

What is Afterpay?

Banks and retailers are increasingly offering flexible payment options for people shopping online, like Afterpay.

If you’ve never used it before, this Afterpay for beginners guide is a useful way to get your head around this online payment service, before dipping your toes in.

What is Afterpay?

Afterpay is designed to be a buy-now-pay-later service, working on much the same philosophy of the ‘lay-by’ service you might have used in the past.

Afterpay breaks a transaction down into smaller instalments, which can theoretically be a more manageable way to making a larger purchase, especially if you’re on a tight budget.

How does Afterpay work?

Once you’ve signed up with Afterpay, participating online retailers will allow you to make a purchase with this payment service.

The only thing that’s different is the way the transaction is processed from your credit or debit card.

Instead of one lump sum which is paid upfront, Afterpay payments are made over multiple transactions. For instance, a $500 chest of drawers could be paid off in four instalments of $125, which could be much more manageable for some shoppers.

What are the pros and cons of Afterpay?

As with every online payment service, Afterpay has some pros and cons for users:


  • Afterpay can be budget-friendly – Afterpay can be a budget-friendly way to make a major purchase, letting you pay off an item in instalments you can incorporate into your budget.
  • You won’t be charged interest – Unlike other buy-now-pay-later services, Afterpay won’t slug you additional interest charges while you’re making repayments.
  • Afterpay lets you have your item straight away – Another benefit is the fact that you can access your purchase straight away, rather than waiting until you’ve completed your Afterpay repayments.


  • Fees can kick in – Afterpay late payment fees can be steep, so it’s important to keep an eye on your account and make sure all your payments are coming through.
  • Temptation to spend can be high – Not having to pay the full amount straight away can tempt you into buying items you can’t afford, even over multiple repayments.
  • Payment schedule it set in stone – Once you’ve made an Afterpay purchase, your repayment schedule is set in stone, although you can make additional repayments.

Beginner’s tips for using Afterpay safely

If you’re careful, Afterpay can be a useful shopping tool. Here are some Afterpay beginner’s tips:

  • Stick to a budget – Crunch the numbers and see how much you can afford, making sure you’ve got enough money set aside for bills and everyday expenses.
  • Use your debit card – Linking your debit card to Afterpay ensures you’re still only spending money you will have in the future, provided you’re sticking to budget.
  • Payment reminders – Afterpay automatically deducts funds from your account, which can be a problem if there’s not enough money in there. To avoid late payment fees, set up regular reminders and make sure you always have enough money in your account.

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Learn more about bank accounts

Can you open a bank account at 16?

Yes, you can open a bank account at 16, or even younger. If you’re 13 or under, you will probably need a parent to accompany you to a branch.

Can I start a bank account online?

Yes, most lenders that operate in Australia will let you set up a bank account online. The process is usually simple and takes five to 10 minutes. You will probably need to provide a passport or birth certificate, as well as a driver’s licence, Medicare card or another form of secondary identification. Requirements differ from lender to lender, so some institutions might ask for more or different forms of ID.

How can I wire money to a bank account?

You can wire money to an Australian bank account either through your own bank or by using a money transfer company such as Western Union or MoneyGram. Either way, you’ll need the other person’s name, BSB number and account number. If you use a money transfer company, you might also need to provide the recipient’s address for large payments.

Can foreigners open bank accounts in Australia?

Many Australian lenders allow foreigners to open bank accounts in Australia. Often, this can be done before you arrive in the country – with no Australian address required. When you get to Australia, you can pick up your debit card, using your passport as identification.

How can I check my bank account balance online?

Checking your bank account balance online is a simple process. Once you’ve logged in to your online banking, clock on the relevant account and the balance should be visible.

Which bank is best for business accounts?

Unfortunately, there’s no definitive answer to the question of which bank is best for business accounts. That’s because ‘best’ will differ from customer to customer, depending on their unique circumstances. These include not only your company’s financial position, but also its size, its age and the sector in which it operates. Another factor to consider is what features you want in a bank account. Your business may require different features than another business; and your business may require different features tomorrow than it does today.

The best thing to do is to thoroughly research the market before opening a business account. And when you do open an account, you should reassess your options every year or two, because the market moves quickly. A particular bank might offer the best account today, but be surpassed by one or several rivals tomorrow.

How can you cash a cheque without a bank account?

You can cash a cheque without a bank account if you visit the bank that issued the cheque. For example, if somebody sends you a cheque from Bank X (as written on the cheque) and you visit Bank X, it’s likely that Bank X will let you cash the cheque – provided the person who wrote the cheque has enough money in their account. Bank X would probably charge you a fee for the service.

How do you transfer money from PayPal to a bank account?

Transferring money from PayPal to an Australian bank account is simple. Just follow these three steps:

  • Go to your Wallet
  • Click ‘Transfer Money’
  • Follow the instructions

The money will take three to seven business days to reach your bank account.

Once you’ve made the transfer request, it can’t be withdrawn.

Can you get a payday loan without a bank account?

Yes. Some payday lenders are willing to transfer loans to prepaid debit cards instead of bank accounts.

How can I deposit cash into my bank account?

The traditional way to deposit cash into your bank account is to go to a branch and give it to a teller. These days, many banks will allow you to make deposits through an ATM as well.

How do you deposit change into your bank account?

One way to deposit change into your bank account is to visit a branch. Many lenders will also allow you to deposit your change through one of their ATMs.

What do I need to open a company bank account?

To open a company bank account, you will probably have to provide 100 points of ID, an ABN and an ACN. You will probably have to provide the details of all signatories as well.

Can I find my bank account number online?

Yes, you can find your bank account number by logging into your online banking and clicking on the relevant account.

Do you need a bank account to sell on eBay?

You don’t need a bank account to sell on eBay. But if you don’t have a bank account, you must provide either a credit card or debit card.