Background: Afterpay's the buy now, pay later company that lets customers purchase an item, and pay it back in interest-free instalments. They were recently bought out by Square, and they're launching a new app called Money.

What happened: The Money app offers users a savings account with a 1% interest, and a debit card, all via Westpac. But the latest feature, called Retro Afterpay, will let users borrow up to $200 for retrospective purchases.

What else: Here's how it works: if you've made an outright purchase in the last 72 hours, Afterpay will let you borrow up to $200 to pay off that purchase. Then, you pay back the $200 in four instalments, like any Afterpay purchase.

So what's the key learning?

💡As BNPL platforms become more popular, we're seeing a structural shift away from the credit economy (i.e. credit cards) to the debit economy. 

💡In the US, the use of debit surged 21% in October last year, while credit declined 4%, compared to the same time the previous year. In Australia, the average credit card balance in October 2020 was close to a 14-year-low.

💡Young people, particularly women, are driving this shift. This cohort are choosing BNPL schemes over credit cards. But the real question is, is Afterpay just creating another way for people to delay payments that need to be paid? At what point are consumers going to find themselves with too much debt?