Uber and Uber Eats partners with Afterpay to offer buy now, pay later options amid debt spiral concerns
The ride-share and food delivery service providers have now partnered with Afterpay to offer buy now, pay later (BNPL) payment options in Australia and New Zealand.
But debt experts worry that allowing BNPL payments for essential goods and services will leave vulnerable Australians open to dangerous debt spirals.
An Afterpay spokesperson told 7NEWS.com.au that the company is 'proud' to partner with the prolific apps and provide people with 'flexible' ways to pay.
'We're giving customers greater control over how and when they pay. It's a seamless addition to Uber Wallet,' the spokesperson said.
'From essentials to everyday transport, we believe BNPL has the potential to be accepted anywhere a traditional credit card is — and this is another exciting step in that direction.'
'Afterpay has no fees when customers pay on time, with no risk of revolving debt spirals.'
But National Debt Hotline co-ordinator Vicky Staff told 7NEWS.com.au that she does not agree that there is no risk of debt spirals.
She said the National Debt Hotline regularly sees 'evidence of debt spiralling' involving BNPL arrangements, despite new BNPL reforms for consumer protection in Australia.
'We're concerned that the widespread availability of BNPL products is normalising the use of credit to pay for small day-to-day transactions,' Staff said.
'It's really easy to lose track of how much debt you're accumulating if you're using credit to pay for those small things day-to-day, which means that BNPL accounts can get out of control pretty quickly.'
Uber and Uber Eats have introduced BNPL protections, such as a ban on customers who miss a repayment, a cap on late fees, and a requirement that customers make their first payment upfront.
But if customers want to lower their spending limit, they will need to contact Uber customer service directly.
Staff told 7NEWS.com.au that vulnerable Australians can be confused by BNPL services, or find ways around safety features, and noted that many people who contact the National Debt Hotline have debts involving multiple BNPL accounts.
'If you're using multiple BNPL accounts to pay for lots of small day-to-day transactions, it can easily snowball into a debt spiral,' she said.
BNPL services are connected to customer bank accounts via direct debit.
Staff warned that these BNPL debits 'compete with more important direct debits such as rent or mortgage repayments', and that when multiple accounts begin 'taking chunks' from the same balance on various dates, it can become hard to keep track of.
Between the first and second quarter of 2025 alone, Staff noted a small uptick — from 6 per cent to 7 per cent — in the number of people reaching out to the National Debt Hotline chat service in BNPL-related financial hardship.
7NEWS.com.au has also contacted Uber for comment.
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