Small business owner still waiting to be paid by buy now pay later operator Genoapay

Genoapay will stop offering its service in New Zealand from April 11. Photo / Dean Purcell.

A small business owner is still waiting to be paid by buy now pay later operator Genoapay - two weeks after her customer made the purchase.

Melissa Brandt, who sells crystals via her Hamilton shop and online said she was owed $790 from a sale made through Genoapay two weeks ago.

“I’m now behind on my lease because I had been counting on that money.”

And she knows of six other retailers - all in the crystal trade - who are also waiting for payments from Genoapay.

A spokesman for Genoapay owner Latitude Financial said as a result of a temporary processing issue it was unable to make three days of payments to Genoapay merchants early last week.

“We apologise to the merchants and are working to make the missed payments as soon as possible.”

ASX-listed Latitude Financial, which is currently dealing with a massive cyber attack, has been approached for comment.

On Monday the company said the data of 7.9 million New Zealand and Australian drivers’ licences has been stolen - a number worse than previously thought when it first reported the cyber attack on March 16.

Genoapay is also due to stop offering its buy now pay later service in New Zealand on April 11.

Brandt said because of that end date some customers had rushed in to buy her products online using Genoapay.

While she also used Afterpay and Laybuy she said Genoapay had by far been the most popular of the services because it had a weekly payment model.

Under the buy now pay later model shoppers get the item upfront while paying it off in instalments usually over a four, six or eight-week period.

The buy now pay later operator is meant to pay the merchant soon after the purchase and it carries the risk if a shopper fails to meet their payments.

Brandt said in the past Genoapay had paid her within three hours of an email confirming a purchase had been made.

But it was now two weeks after the purchase had been made.

“Most of my revenue was through there so I’m a couple of weeks behind on my lease for the shop now.”

Brandt said she had tried ringing Genoapay but it just went to an automated message.

“It just goes to an automated thing saying they are not taking any calls at the moment. I have emailed numerous times. I have even tried to message their Facebook page. I tried to leave a note on their wall - but I see they haven’t published it.

“I have tried everything.”

Melissa Brandt, owner of Mel's Crystals and Things. Photo / Supplied

Brandt said while the amount may not be a large sum, to a small business like hers it was a lot of money.

A Facebook group for crystal sellers had also seen six others retailers come forward to say they had not received money due from Genoapay.

When announcing its exit from the New Zealand market Lattitude told its shareholders that it had decided to close its BNPL offering in New Zealand and Australia after completing an extensive strategic review of the service.

“BNPL has achieved its aim by attracting more than half a million customers to Latitude but is an immaterial part of the business, representing approximately 0.3 per cent of receivables.

“Given this, and as a consequence of the uncertainty surrounding the future regulatory environment, Latitude believes now is the right time to exit the sector.

“Latitude remains fully supportive of regulating BNPL as a credit product.”

Genoapay’s move follows that of Humm which announced in August that it would close down its Kiwi operation on September 25.

Last month receivers were appointed to troubled Australian buy-now-pay-later company Openpay, which has been operating in New Zealand since 2013.

The Government is in the process of finalising regulation of the sector with consultation closing on its proposals on March 10.

Late last year the New Zealand Government announced it would bring buy now pay later under the Credit Contracts and Consumer Finance Act and introduce a cap, currently proposed at $600, over which the companies would be required to undertake affordability checks before giving the loans out.

Buy now pay later isn’t currently caught under the CCCFA because consumers don’t pay interest on it.

But those who are late making the payments or fail to pay off the item are hit by hefty fees and financial mentors have been concerned by some users getting caught in a debt cycle by the new payment products, which have seen a huge burst in popularity in recent years.