Limepay is a buy now, pay later (BNPL) platform that claims to return the power to retailers by offering a fully integrated payment gateway. So, when you checkout, you won’t see any third-party redirects. Instead, you can expect a seamless and secure transaction completed within the retailer’s payment ecosystem. Depending on the retailer, you can divide your payments into four, six or eight installments. Using Limepay is free for customers, but you’ll pay late fees if you cannot keep up with your repayments.
What is Limepay and how does it work?
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This article is over two years old, last updated on August 4, 2022. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent bnpl articles.
How does Limepay work?
Limepay allows retailers to operate their own BNPL platform by providing them with a white-label design that the brand can own. Merchant websites can integrate Limepay into their payment framework through plugins provided by the company – offering it as a payment alternative within their ecosystem at checkout.
As a customer, you don’t need to sign up for a Limepay account to use the service. Instead, you sign up directly with your favourite retailer, but you’ll need to meet the minimum eligibility criteria for using the service.
Limepay is only available for customers who are 18 years or older. You also need a valid email address and phone number, and a credit or debit card that Limepay will use to collect the payments.
Once you reach checkout, you’ll see two options – to pay for your purchase upfront (pay in full) or pay in instalments (pay in four). If you choose the latter, you’ll make the first instalment on the date of purchase, and the remaining three instalments will be due every 15 days from the day of the purchase unless you opt to pay off the balance earlier. The next step is entering your credit or debit card details that you will use to make your payments.
It’s worth noting that the option to pay your purchase in instalments is subject to Limepay’s approval, based on various background and credit checks run by the company. In case they find you unsuitable for credit, you may have to opt to pay in full or use another payment method available to you.
Limepay also allows retailers to customise their own payment plans. For instance, a clothing retailer may allow customers to pay off their purchase in four instalments, but a brand selling furniture may allow you to split your payments into six or eight instalments.
Limepay’s point of difference from other BNPL services is its merchant-first approach. The company enables partner merchants to retain their branding at every touchpoint, including checkout and payment reminders. It also aims to improve customer experience by avoiding third-party redirects that sometimes subject customers to advertisements. Limepay’s data management system also ensures that return customers are recognised, making future checkouts more streamlined. Additionally, the company also provides customer data to its partner merchants, in an effort to help them build stronger relationships with their clients.
Does Limepay charge any interest from customers?
No, Limepay doesn’t charge you any interest on your payment plans. Like other BNPL platforms, you don’t pay anything to use the service unless you miss a repayment. A missed repayment will cost you a $5 late fee, capped at $15 for any single payment plan.
Merchants are generally charged a price per transaction by Limepay. The percentage charged depends on the payment volume and purchase category.
Does using Limepay affect my credit score?
According to Limepay’s website, it will run identity and background checks on you before approving your payment plan. This may also include credit checks, depending on the amount of money you wish to borrow or whenever the company considers it necessary to assess your suitability for credit. Records of such enquiries and their result may appear on your credit file. If your application is rejected, it may impact your future credit eligibility to some extent.
When you apply for a home loan or any other type of loan, the lender pulls out your credit report to assess your creditworthiness as a borrower. Rejected credit applications may appear as red flags. Additionally, having multiple credit enquiries on your file too close to each other can make you appear credit hungry, which is not something lenders want to see. This may happen when you apply for multiple credit cards or open several BNPL accounts at once.
Eventually, buying now and paying later for your purchases using a BNPL service is similar to using a credit card and fraught with the same risks unless used responsibly. Services like Limepay can help you budget for your purchases better by breaking them down into interest-free instalments. Still, if you use these services to buy products you cannot afford, or, if you are struggling to make ends meet and use a BNPL service to meet your day-to-day expenses, it could lead you to a debt trap and potentially worsen your financial situation.
A good tip is to budget for your instalments in advance so you can pay them off in time without incurring any late fees, which can quickly add up in some cases. If you find it challenging to stick to a budget or tend to shop impulsively, it may be better for you to rely on your savings to pay for your shopping.
Questions you may have
What are the alternatives to humm I could consider?
Afterpay and Zip Pay are the leading BNPL providers in Australia. However, they only allow smaller transaction amounts, comparable to the 'Little things' wallet on your humm account.
If you are looking for help with a bigger expense, Brighte is one BNPL platform that may allow you to borrow a maximum of $30,000 for up to 60 months. However, Brighte generally only offers interest-free payment plans for making energy-efficient upgrades to your home, such as solar and batteries, or other home improvement projects.
Do BNPL service providers charge late payment fees?
BNPL service providers will invariably charge you late fees if you miss your repayments, which can range from $5-$15 each time the payment is delayed. Late payment fees are also usually capped at either a set dollar figure or as centage of the outstanding balance.
Can I sign up on multiple BNPL platforms?
You can sign up for multiple BNPL services, but consider using just one platform as you will be accumulating multiple debts otherwise, which can be difficult to keep track of. You also risk having to pay more fees to more providers.
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Product database updated 05 Oct, 2024
Fact Checked
This article was reviewed by Personal Finance Editor Georgia Brown before it was published as part of RateCity's Fact Check process.
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