thread Re: Using AfterPay to fund business purchases in Community Corner

Using AfterPay to fund business purchases

HC_Charlie — Mon, 27 May 2024 15:13:14 GMT

You may have known that Square users can accept AfterPay as a payment method on their websites and at their POS. If you don't know, AfterPay is a great way to give your customers an option to fund a larger purchase over a length of time. As a Seller, you get paid up-front, and the buyer doesn't have to spend the full amount all at once and can "finance" their purchase. This could open your business up to sell more, or generating more large purchases. Check it out if you don't already use it!

But I'm writing this post today because I just read something interesting from the buyer or consumer side of a transaction. I was investigating making a large electronics purchase for my own business, and thought about using a payment plan service. I noticed something called Affirm on Walmart's website, and did a bit of investigating. The interesting info I discovered is that some of these "buy now, pay later" services (including some Affirm purchases) can impact your credit score/report, and EVEN if you pay on time, it could negatively impact your credit.

I'm no expert in credit reporting so I can't explain why or how this works, but I read in this article that AfterPay may be a safer way to extend your payment options; the article says AfterPay does NOT report anything to the credit bureaus. I always pay on time with my bills, but the idea that my credit could be negatively impacted EVEN if I pay on time, makes me more inclined to consider a longer-term payment option that doesn't report on my credit score.

Have you used AfterPay to fund any purchases for your business, or use AfterPay on your Square website?

Re: Using AfterPay to fund business purchases

maxpete — Mon, 27 May 2024 22:12:22 GMT

Glad you brought this up, @HC_Charlie! To be honest, I have not used any BNPL services personally as I try not to bring on any debt that I can avoid. Even though I do see the need and appeal for it.

I believe @alexandriak has this set up for her store.

Re: Using AfterPay to fund business purchases

alexandriak — Tue, 28 May 2024 14:46:23 GMT

I haven't personally used it but I have a lot of customers that do for our more expensive luxury designer bags. It's no interest to them (as far as I know unless you miss a payment or something maybe) and if it doesn't impact their credit I can't see why it would be a bad option. If it came down to it I could see myself using it ONLY if I didn't have a zero % interest offer from my personal credit card to begin with.

I've been with discover personally long enough that I almost never pay them interest. I call once a year and get a 0% offer placed on my card, usually for a 12 month period. Once that period ends I will wait about 2-3 months and call back and ask for another, which so far they've always given me. In between those offers I just pay off my card.

Plus then I get cashback LOL

Re: Using AfterPay to fund business purchases

alexandriak — Tue, 28 May 2024 14:46:34 GMT

thanks for the tag!

Re: Using AfterPay to fund business purchases

alexandriak — Tue, 28 May 2024 14:47:04 GMT

Also to add I also offer Affirm to customers as well both in store and online. I would say afterpay gets used much more.

Re: Using AfterPay to fund business purchases

Minion — Thu, 30 May 2024 22:36:05 GMT

I avoid these things when I can. Usually a CC with 0% interest and rewards will get me more in the long run.

As far as I am aware , (not a credit expert either) , I didn't think they actually affected your FICO score. I browse the FICO Forums a few times a week and I have seen others mention of a "flag/mark" so to speak maybe on their credit report, but it didn't' seem to negatively impact their report. Assuming they were all paid on time etc etc.

I did seem to come across this one with Affirm though that maybe in the works or already out, creating their own model for FICO

I only offer Affirm on my site for two reasons. One, the charge isn't as heavy a hit as After pay. And the second is that after lets say a Truck Bed Cover , and a set of Running Boards. Pretty much already over the $2k threshold for Afterpay.