Afterpay's arena naming marks a turning point for Australia's slowing BNPL market

Australia's buy-now-pay-later sector, once booming with rapid annual growth, has decelerated to $1.5 billion in 2025, half the pace of its late-2010s surge, as noted by the Reserve Bank. Regulatory changes enacted in 2025 reclassified BNPL as credit, obliging firms to conduct credit checks and report accounts, which analysts say has stripped the model of its instant-approval appeal. Afterpay, the market leader with 4.5 million customers, has never posted a profit locally but is pushing brand visibility by acquiring naming rights to a Sydney Olympic Park arena, promising BNPL options for tickets and services.

While PayPal's Pay-in-4 service shows no growth since 2023 and Zip saw a 7 % user decline and is exiting New Zealand, Klarna and Afterpay claim continued expansion. The industry now relies heavily on merchant fees—Afterpay earned $625 million from such fees in 2025—and late-fee revenue, which reached $123 million annually. Experts warn that higher merchant costs and a ban on card surcharging could further limit BNPL adoption, though some analysts believe modest growth may persist for a few years.