Latitude Group has announced it has scrapped its buy now, pay later (BNPL) offering, LatitudePay, after three and a half years in the Australian market.
Launched to the public back in September 2019 off the back of surging popularity in BNPL services, Latitude’s pay-in-four offering was pitched as a direct rival to local market leaders Afterpay, Zip Co and Humm.
LatitudePay will be taken offline on 11 April 2023.
The financial services group cited “uncertainty surrounding the future regulatory environment” for its decision to jettison its BNPL arm, adding that “now is the right time to exit the sector”.
Treasury has released an options paper with proposals for regulating the BNPL sector, with the strictest of the three options mandating an Australian Credit License for all BNPL providers that would require them to meet responsible lending obligations under the Credit Act.
Australia’s BNPL sector has faced mounting pressure over the last year, with increasing bad debts, lacklustre profitability, challenging market conditions driven by rising inflation, and the big four banks creating their own in-built BNPL offerings.
Latitude, by mutual agreement, scrapped a proposed $250 million acquisition of Humm’s BNPL consumer business mid-last year, after Humm reported a 61 per cent year-on-year loss in cash net profit after tax.
Latitude said that while its BNPL arm achieved its aim by “attracting more than half a million customers to Latitude”, it remains an “immaterial part of the business, representing approximately 0.3 per cent of receivables”.
Latitude said it is currently in the process of contacting customers and merchants to inform them of the discontinuation of LatitudePay and the NZ-based Genoapay service.
The financial services group added that it will continue to support its two million customers and 5,000 merchant partners it serves through its main instalments products: Latitude GO, Latitude Gem and CreditLine.