What is LatitudePay and how does it work?

Just like Afterpay and Zip Pay, LatitudePay lets you buy what you want and pay for it later in smaller instalments without charging any interest. The platform allows you to spend up to $1,000 with selected retailers. You pay 10 per cent of the cost upfront, and the remaining amount is paid over the next nine weeks. 

You can close an open payment plan at any time during the 10 weeks without paying any additional fee. It’s also possible to change the day of the week the money gets deducted from your account, but only once during the 10-week payment period.  

Signing up on LatitudePay is quick and free. You can go to the LatitudePay website to set up your account by filling in some personal information and providing identification, such as your passport or driver’s license. 

Do keep in mind that you need to be at least 18-years old, and be a citizen, Australian permanent resident, or have at least 12 months remaining on your temporary visa, to sign up for LatitudePay. You are required to link a valid credit or debit card with your LatitudePay account to start using the service.

The LatitudePay website says the BNPL provider will run a quick credit check and ID check before approving your account to ensure responsible lending. Once approved, you can simply select LatitudePay as your preferred payment method at checkout with a variety of retailers, both online and in-store. You don’t pay any interest on your repayments, but if you miss a payment you will be hit with a $10 late payment fine. The BNPL provider will reduce your credit limit after a couple of missed payments and eventually block your account if you cannot pay the amount owing. 

You can use LatitudePay to shop in-store or online at select retailers that accept it as a payment option. The first retailer to partner with LatitudePay was Harvey Norman, but the list is growing consistently to include The Good Guys, JB Hi-Fi, Angus & Coote, Bing Lee and Sydney Tools. You can view the complete list of retailers that accept LatitudePay on the BNPL service provider’s website.

Latitude’s new offering, LatitudePay+, can be used for larger purchases, including healthcare and car servicing, at retailers like Beyond Tools, Australian Motors, LaserSight, HCF Dental and Fernwood Fitness. You can even upskill with a course at Online Courses Australia and use LatitudePay+ to spread the cost over a few months.

Compared to LatitudePay, LatitudePay+ allows you to spend up to $5,000 and pay it back in monthly instalments. Depending on the retailer you are buying from, you may be offered payment plans ranging from six months to 24 months. All payment plans on the platform are interest-free, but there’s a monthly account keeping fee of $10 for using LatitudePay+.

LatitudePay doesn’t charge any fees to customers who pay on time. There’s only a $10 late payment fee, but caps do apply. It’s important to read the terms and conditions closely before using the service to understand the maximum amount you may be charged as late fees if you happen to fall behind on your payment plan.

Even though LatitudePay doesn’t charge you anything, the bank that issued your card (which you linked to LatitudePay) may charge you cash advance fees for your transactions on LatitudePay. 

This may happen when your bank views the transaction as a cash advance instead of a regular purchase. A cash advance is when you use your credit card to withdraw money at an ATM or bank branch. By doing this, you are withdrawing money using a line of credit. Transferring money from your credit card account to your transaction account or using it to buy gift cards may also be considered a cash advance by some banks. 

However, each bank or credit provider has different rules, and it’s worth checking with your credit provider about what constitutes a cash advance on your card. If you find you are being charged a cash advance fee for using LatitudePay, it could help to call up your credit provider and explain the nature of the payment to request a fee reversal.

LatitudePay says it carries out a quick credit check before approving a new account. However, a quick credit check generally refers to a soft credit check, which is unlikely to impact your credit score, positively or negatively. Still, there are other ways in which using a BNPL service could impact your credit score. For instance, taking on more credit than you can afford will eventually lead to financial problems and hurt your credit score if you cannot keep up with your repayments. 

Missing a repayment on your BNPL payment plan could see you getting hit by a late payment fee. These can quickly add up in some cases. LatitudePay has capped the maximum late fee on various transactions, and it will block your account if you miss five repayments in a row. Still, it’s easy to open multiple BNPL accounts, which can potentially damage your financial situation. Most BNPL service providers also reserve the right to share information about your payment defaults with third parties like credit reporting bureaus, which could adversely impact your credit score.

Eventually, it’s up to you how you use the service. Used responsibly, It could be a helpful tool to manage your finances but you need to avoid falling into a debt trap. If you find yourself in financial trouble and unable to make your LatitudePay repayments on time, LatitudePay encourages you to connect with their customer service team to seek a modified payment plan. You may even consider calling the National Debt Helpline to find a long-term solution to getting your finances back on track.