An Analysis of Clearpay: Buy Now Pay Later Service Without Interest

Founded in 2014, Clearpay is the younger sister of the Australian buy now, pay later website Afterpay. Retailers in Australia, the United States, Canada, New Zealand, the European Union, and the United Kingdom have all adopted Afterpay (where it is called Clearpay).

Once a Scheme Implementation Deed was signed, Square purchased Afterpay in August 2021.

What is the procedure for using Clearpay?

Clearpay collaborates with a selection of popular shops, allowing buyers to buy things online or in-store there and then, but pay for them later. Customers use Clearpay like they would any other online payment service, shopping at their preferred online merchant of choice as normal, and then choosing Clearpay as their payment option at checkout. Now is the time to either log in to your existing Clearpay account or sign up for a new one and enter your payment information. The payment for your new goods will be split into 4 equal portions – the first of which will be due immediately and the other 3 will be automatically deducted from your account at 2-week intervals.

Advantages of using Clearpay as a shopper

  1. There are zero associated costs. As long as you pay on time, you can utilize Clearpay at no cost. However, there will be additional charges for any payments that are late.
  2. There will be no interest charged. In addition, there is no interest added to your balance using Clearpay.
  3. Telegraphic transfers are used to make payments automatically. The second, third, and fourth payments will be deducted from your bank account on the second, third, and fourth of the month, respectively, by Clearpay.
  4. Your order will be processed and sent out immediately. Your purchase will be dispatched as soon as you make your first Clearpay payment because Clearpay pays the merchant in advance.
  5. Simple division. There is only one payment plan available with Clearpay, and it divides your total into four equal installments that are automatically refunded.

How much does it cost to use Clearpay?

When you use Clearpay, you won’t have to worry about interest or hidden fees. Extra fees will only apply if your bank account balance is insufficient to cover the cost of the scheduled payments. If this occurs, a late fee will be assessed and you’ll need to use your Clearpay account to pay off the debt.

What happens if I miss a payment deadline?

Whenever a payment is overdue, Clearpay immediately disables the account and prevents any future purchases from being made. For orders under £24, the maximum late fee is £6. If you place an order that costs more than £24, you will have until 11:59 pm the next day to pay for it using another payment method without incurring a late fee of £6. If payment is not received within 7 days, a late fee of £6 will be added. Any late fees assessed on orders of £24 or more are limited to the lesser of 25% of the order amount or £36.

Do we recommend Clearpay?

There’s a solid reason why Clearpay is one of the most widely used BNPL systems in the UK. The software has a lot of useful functions, and it’s simple to use, set up, and administer.

There are two major issues. Firstly, there are fewer payment plan options than Klarna’s three. While this can simplify things for users, at least until the first of the four payments are made, it doesn’t allow for a “trial before you purchase.” Second, many customers will likely go for Klarna instead of Clearpay because Klarna does not impose any late penalties on its customers.

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