Some customers of Australia’s Afterpay have been asked to close buy-now-pay-later accounts to qualify for a mortgage and offered a credit card upon qualification, the BNPL provider said, underscoring fierce competition in the consumer finance sub-sectors. Afterpay claimed banks were capitalising on a perception of BNPL users as riskier than traditional borrowers to protect a declining lending category. Australian interest-accruing credit card debt is down 30% in half a decade as borrowers seek cheaper options. The company added that its survey found BNPL users had credit scores and on-time repayment records broadly in line with credit card users. The BNPL model has avoided regulation under Australian consumer credit laws so far as it doesn’t involve interest. However, “if it looks and acts like credit, then it should be regulated as such,” the Australian government had said last year. New legislation requiring BNPL firms to run credit checks on borrowers kicks in on Tuesday, which, Afterpay’s Head of Public Policy Michael Saadat hopes, would improve transparency around user creditworthiness. The main reason Afterpay customers close their accounts is because their lender or broker told them to, and “this should not be something that is driven by misperception of the regulatory requirements,” Saadat told.