Buy Now, Pay Later providers present themselves as neutral financial services organisations that expand consumer access to credit. In practice, however, many operate internal risk and compliance policies similar to those used by larger financial institutions, including policies that exclude entire categories of lawful businesses from accessing their platforms.
The Buy Now, Pay Later Code of Practice is administered by the Australian Finance Industry Association (AFIA). It is developed and governed by its members, which include Afterpay, Zip, Brighte, Payright and Plenti. Through that Code, members have specifically chosen to exclude a range of industries, including, as it happens, legitimate firearms businesses.
Section 8.7(f) of the Code requires AFIA members to take “reasonable and appropriate steps” to ensure their merchants or retail partners do not provide BNPL products or services for “online gambling, retail gambling, gambling at domestic or offshore casinos and the purchase of firearms.”
This provision prohibits the use of BNPL services for firearms purchases regardless of the circumstances of the transaction or the regulatory environment in which it takes place. In practice, the restriction goes further still, with retailers that simply sell firearms, being denied access to BNPL services altogether, even where the service is not intended to be used for firearms transactions.
When Promontory announced an independent review of the Code and opened the process to public submissions, it provided an opportunity to revisit these provisions. The review was tasked with considering whether the Code continues to operate effectively as the BNPL sector expands across the Australian retail economy, including whether section 8.7 should remain in place.
Despite our efforts, commonsense was ignored and woke won the day. Following the review process, Promontory’s final report noted that there was “broad support for these restrictions across varied stakeholders” and ultimately recommended that no changes be made to this part of the Code. The review also recorded that the shooting industry was the only sector advocating for removal of the restriction.
It’s no surprise either that the AFIA accepted all recommendations.
The findings were revealing though, as the restriction was not retained because the review identified a gap in the regulatory framework governing firearms sales, nor because there was evidence that BNPL services introduce new risks within that system. Rather, the prohibition appears to have been maintained largely because the broader stakeholder environment was already comfortable with the exclusion.
From a policy perspective, this is where the problem begins. Australia already has one of the most comprehensive firearms regulatory systems in the world. Firearms cannot be purchased casually or anonymously and buyers must hold a valid firearms licence, obtain a permit to acquire and complete the transaction through a licensed firearms dealer. Dealers must record the sale and report it through the relevant regulatory systems.
These safeguards ensure firearms transactions remain traceable and subject to oversight. Licensed dealers therefore play a central role within the regulatory framework, acting as the controlled point through which lawful transfers occur.
So, what’s the actual problem?
The BNPL restriction does not appear to address any deficiency in the existing regulatory regime, instead it imposes an additional financial limitation on top of a system that is already tightly controlled by regulation. This means the result is less about consumer protection and all about exclusion.
The clause in the Code groups firearms alongside gambling and casino activities and excludes the category altogether. It fails to recognise the regulatory context in which firearms sales occur, nor does it distinguish between a licensed firearms retailer operating under Australian law and industries that may present materially different risks.
In effect, the decision treats firearms sales as unsuitable for financial services and represents another example of de-banking, an issue I have discussed previously.
De-banking is typically associated with banks closing accounts or refusing services to certain sectors. However, the underlying dynamic is broader. Financial service providers across the system are increasingly adopting category based exclusions, often influenced by ESG frameworks and internal values policies, developed by executives who believe they are morally superior to everyone else.
The BNPL Code provides a clear demonstration of how de-banking can occur through governance mechanisms rather than traditional banking decisions. Instead of refusing to open an account, a financial service provider simply embeds the exclusion within its operating rules.
The outcome is the same, a lawful industry is denied access to a mainstream financial product, not because the law requires it, but because financial institutions have determined that the sector sits ‘outside their preferred risk or values framework’.
This becomes particularly problematic when the industry concerned is already subject to extensive government regulation. When financial institutions overlay their own sector wide exclusions on top of a legislative framework designed by Parliament, they effectively create a parallel form of economic regulation driven by corporate policy rather than law.
Financial infrastructure is essential for modern businesses. When lawful sectors are progressively excluded from banking services, payment platforms, lending products or consumer finance tools, the cumulative effect begins to resemble financial exclusion. That is precisely what de-banking represents.
The BNPL restriction may appear minor in isolation, but it reflects a broader trend policymakers should pay attention to. Financial institutions are increasingly making decisions about which industries they will service without reference to the regulatory frameworks already governing those industries.
If that trend continues unchecked, access to financial infrastructure will be determined not by the rule of law, but by the internal policies of private financial institutions. For highly regulated sectors such as the Australian shooting industry, this raises an obvious question. If the law already governs how the industry operates, why should access to financial services depend on whether the sector aligns with the values frameworks of financial service providers?