Coronavirus: Afterpay withholding payments to New Zealand retailers during lockdown

A number of Kiwi businesses are outraged after an online payment scheme announced it is withholding payments to retailers during the lockdown. 

Afterpay works like a hire purchase that allows people to buy and receive goods straightaway but pay them off over time. 

But some retailers aren't being paid, and they're worried.

Afterpay's slogan "Shop now, enjoy now, pay later" sounds like a great deal for customers, but not so much for retailers.

Owner of Treat Yourself Trinkets Taryn Ibell says her payments have now been delayed.

"I was pissed off, because at the moment any sales is money coming in to help keep me going," she told Newshub.

Her website sells jewellery and crystals, but her business has taken a hammering since the lockdown began since she relies on Afterpay to boost sales.

"This could potentially see me have to close until I can build things back up again. It'll be like going back to when I first started and had $10 to my name."

When customers use Afterpay they pay for their goods over four fortnightly instalments, but their items are shipped straight away.

Afterpay normally pays the online business the full amount upfront, but that's changed since the lockdown.

In an email to businesses on Friday, the company said it's "holding funds for all goods not considered 'essential' until companies can provide confirmation of shipment".

Since the lockdown began, Ibell has only had four orders and three of them have been through Afterpay.

"Now I'm not going to see those funds until we get released," she says.

Ibell says her website, and many others, have made it clear goods will be shipped as soon as the lockdown is lifted.

Retail NZ CEO Greg Harford told Newshub that if goods are being sold and kept aside for those customers to be dispatched after lockdown, then there's "really no need" for payment to be withheld.

In a statement, Afterpay says not all businesses are affected, but it's delaying payments to maintain a "positive customers experience". It will process refunds where people haven't received their goods or they don't want to keep waiting for them.

Afterpay has told Ibell it will contact her this week, but she's not holding out much hope for a positive resolution.