Buy now, pay later service Laybuy collapses in Australia and New Zealand: Here’s what customers need to know

Buy now, pay later service Laybuy has hit financial troubles with the company’s Australian and New Zealand businesses placed into receivership. 

Laybuy offers an alternative to credit cards, allowing customers to buy items and pay them off in six interest-free payments.

It told customers that as of June 17 most of its services are not functioning but that repayments are still due and being processed. 

Laybuy was founded by Gary and Alex Rohloff in New Zealand in 2016 before expanding into Australia and the UK, with the business valued at $358million at its peak.

The UK arm of the company is not affected. 

Laybuy’s platform remains partially offline so new customers cannot sign up and existing customers cannot make new purchases.

Clients will still be able to log into the app, with manual and automatic repayments still working. The business said it was ‘assessing the situation with respect to refunds’.

Late payments will incur a fee and accounts more than 42 days in arrears could be referred to a debt collection agency. 

Founders Alex and Gary Rohloff (pictured) launched the business in New Zealand before expanding to Australia and the UK. CEO Gary Rohloff said he was devastated by the company’s financial woes

Deloitte Australia’s Glen Kanevsky and Jason Tracy have been appointed receivers and managers of Laybuy Australia Pty Limited.

David Webb and Robert Campbell of Deloitte New Zealand have been appointed receivers and managers over Laybuy Group Holdings Limited and Laybuy Holdings Limited.  

Unlike liquidation, a company in receivership can return to business once its debts are paid. 

CEO Gary Rohloff said he was devastated by the company’s financial woes.

‘We had been working incredibly hard to execute a plan to achieve profitability after years of rapid growth,’ he said.

Customers will still be able to make repayments and they will be deducted as normal but the app is not accepting new customers or new purchases

Mr Rohloff said attempts to sell the Laybuy business ‘fell over at the last hurdle’ and the board had no option but to place much of the business in receivership.

‘While we have been making good progress over the last two years, the economic downturn has been longer than we expected, and this has had a significant impact on the retail sector in both New Zealand and the United Kingdom.

‘As a result, we have seen reduced consumer spending, higher credit losses, and increased fraudulent activity.

‘This, alongside increased financing costs, created a perfect storm that was difficult for Laybuy to recover from,’ he said.