Should you use 'Buy now pay later' services? Atome vs Grab PayLater vs Hoolah vs OctiFi vs Rely vs Split

If you have done any online shopping in Singapore, you might have noticed that some e-commerce merchants are offering you a new way to check out.

Apart from the traditional credit cards /debit cards and digital payment solutions that require you to pay the full amount upfront or the credit cards that offer instalment plans, we now have the Buy Now Pay Later (BNPL) payment option.

With BNPL, you can delay your payments and split them up into weekly or monthly instalments. Undoubtedly, this payment method is convenient for those on a tight budget who are unable to pay the full amount upfront.

This might also explain why BNPL services are gaining popularity in Singapore.

According to a nationally representative survey of 1,008 Singaporeans aged 16 or older done by Milieu (via Finder) in October 2020; about four in 10 Singaporeans or nearly 1.1 million people have used a BNPL service.

But the worrying this is this: about 27 per cent of Singaporeans admitted to being financially worse off due to a BNPL mistake.

The top five BNPL mistakes 27 per cent of the respondents made include:

But is it all that bad?

I would think otherwise as to me, BNPL services are like fire; a good servant or a bad master.

If used well, they can help you save money. But, if your use of them is not controlled, they could burn you badly.

TL;DR: Buy now pay later services comparison Singapore: Atome vs Grab PayLater vs Hoolah vs OctiFi vs Rely vs Split

Cons of buy now pay later services

1. Gives a false sense of affordability

Call me a financial prude but I have a rule when it comes to my spending.

Aside from big-ticket items like buying your home, or buying a car; I would not spend money on things that I cannot pay off.

I understand that this comes from a position of privilege. But, I also strongly believe in living within my means.

And from the survey, you can see that people tend to make financial mistakes specific to BNPL services.

I would think that this easy access to credit will give you a false sense of affordability and encourage you to spend more recklessly on your wants.

After all, you are still required to pay the full price for the product.

Although the item is more affordable, you are still on the hook for the product that you buy.

But if you don’t have enough to buy it up front, you should seriously reconsider if you should be buying this product.

On balance, these BNPL services can help you pay for the things that you really need urgently. But again, these BNPL services should be used cautiously.

2. Late fees

When using BNPL services, there is generally no interest charged on the loan as the services rely on a taking a cut from merchant sales and late payment fees for revenue.

But, you need to be aware of the late payment fees which will apply if you use a debit card for your BNPL service.

Although you can find them on the respective BNPL provider’s websites, these are often buried deep in the FAQ or help sections.

Take Atome for example. You will have to pay a $20 admin fee and have your account frozen if you miss an instalment payment. If you do not pay up within seven days, you will be charged another $10. But, the maximum admin fee you will have to pay is capped at $60.

As for hoolah, you will be charged with an admin fee of $5 – $30 depending on your order value.

Whereas if you use a credit card , you won’t be charged for the late payment fees as the instalments are automatically charged to your credit card.

But, it is vital that you pay off your credit card on time as these cards have astronomical interest rates of about 25per cent per annum (p.a.) and charge late payment fees as well.

In offering zero interest, these firms make money by taking a cut from their merchants’ revenue sales and charging consumers late payment fees.

Pros of buy now pay later services

1. Credit Card rewards

Although you can use your debit card for BNPL services, it is better if you use a credit card as you can get rewards like cashback, miles or points for instalment payments charged to your credit card!

This is unlike the traditional 0 per cent credit card instalment plans that don’t offer credit card rewards. Also, some banks even charge an additional one-time processing fee based on the transaction amount.

P.S. Use our credit card comparison tool to help you find the best credit card for your needs.

In addition, if you are using cashback credit cards that have a cap on the amount spent on the card that earns cashback each month; you can actually spread out your purchase over a few months using BNPL services to maximise your credit card rewards.

Take for example a cashback credit card like the DBS LiveFresh card .

Although the card offers up to 5 per cent cashback on the eligible online spend category, the total cashback earned will be capped at $20 a month for this category.

This means that you will not receive more cashback if you spend more than $400 a month for this category.

For example, an eligible online purchase of more $1,000 will mean that you will still only earn only $20 cashback.

However, if you split it up over three months, you will get $45 cashback.

Do note that you will not be able to gain credit card rewards with Grab PayLater as most credit cards exclude GrabPay tops from credit card rewards.

2. Freed up money can earn interest in your bank account or insurance savings plan

In addition, another perk of using BNPL services is that you don’t have to pay for everything upfront.

For example, instead of having to pay $1,500 upfront , the payments are split up into three instalments of $500 each over three months.

This means that you can keep $1,000 in your account for about two months or so.

However, to enjoy this benefit, you will need to have a high-interest rate savings account or insurance savings plan that gives you interest on the balance in your account.

But, you won’t be earning too much depending on the account you have.

Better than nothing I suppose:

Now that you are more aware of the pros and cons, here are some guidelines to follow.

This section needs you to reflect a bit and be honest with yourself.

Who should use buy now pay later services?

In my opinion, you should use BNPL services if you are:

• Disciplined with your spending and pay your bills on time
• Able to clearly distinguish between needs and wants.
• Have the money to pay for the whole of your purchase upfront. If you don’t have the money and your purchase is a necessity, you should at least have stable income coming in regularly every month.

Who should not use buy now pay later services?

In my opinion, you should NOT use BNPL services if you have

• Poor impulse control.
• Find it difficult to distinguish between needs and wants.
• Do not have the money to pay for the purchase upfront and don’t have stable income coming in regularly every month.

Buy now pay later services comparison Singapore: Atome vs Hoolah vs Jungle vs OctiFi vs Rely vs Split

Now that you know what you are getting into, here is a comparison of the top BNPL providers in Singapore.

Buy Now Pay Later Provider	Upfront Payment	Instalment Repayment Tenure	Late Payment Fee	Other Charges/Misc.	Processing Fee | Early Repayment Fee	Payment Method	Notable Merchants
Atome	1/3 of total value of purchase	Over 3 months	$20 administrative fee + freezing of Atome account	Extra $10 fee chargeable if outstanding amount and $20 administrative fee are unpaid within 7 days Max. administrative fee capped at $60 per transaction	$0 | $0	Debit/Credit Card (Any Singapore issued card)	Sephora, Zara, IUIGA, Aldo, Marks & Spencer
Grab PayLater	1/4 of total value of purchase or full amount next month	Over 4 months or the next month	Flat $10 admin fee to reactivate your suspended PayLater account if payment is not made on time	You will not receive GrabRewards points for PayLater Instalments		GrabPay Wallet	GrabPay merchants like Scanteak, HipVan etc.
hoolah	1/3 of total value of purchase	Over 3 months	$5: Order value $99.99 or below $15: Order value between $100 and $999.99 $30: Order value $1000 and above	NIL		Debit/Credit Card (Visa or Master)	Alodo, Converse, NIke, Oppo, Puma
OctiFi	1/3 of total value of purchase	Over 3 months	$15: Order values up to S$999.99 Additional $15 for every $1,000 increase in order value	NIL		Debit/Credit Card (From any bank)	Disseta Spa, Electro Bike, Liminal
Rely	1/3 or 1/4 of total value of purchase	Over 3 months or 4 fortnights	$1 to $40 depending on order value	NIL		Debit/Credit Card (Visa or Master)	JD Sports, Limited EDT, Omnidesk, SecretLab, Qoo10
Split	1/3 of total value of purchase	Over 3 months	$0	NIL		Debit/Credit Card (From any bank)	Dyson, Fashrevo, Switch, The Straits Wine Company

For the majority of the BNPL providers, the main differences lie in the late payment fees and the noteworthy merchants you should consider.

Here is a close look at them.

Atome review

First up let’s take a look at Atome.

In terms of late repayment fees, Atome charges quite a bit. There is a flat $20 late repayment fee regardless of how much the cost of your purchase is. Also, you are charged an extra $10 if the outstanding amount and $20 administrative fee are unpaid within 7 days.

Thankfully the maximum you will be charged is $60.

As for their merchants, the lineup has notable names like Sephora, Zara and Marks and Spencer which is quite decent.

Grab PayLater review

Next, we have Grab PayLater.

Their late repayment fees are amongst the lowest as you only need a pay a flat $10 admin fee to reactivate your suspended PayLater account if payment is not made on time.

In terms of merchants, you can use Grab PayLater for Grab services like Grab rides, GrabFood and GrabExpress, Also, you can use Grab PayLater at a small group of merchants like Scanteak and HipVan.

However, the utility is still a bit limited as you will have to topup your GrabPay wallet to use Grab PayLater. The lack of credit card rewards doesn’t help either.

hoolah review

Next up we have hoolah.

Their late repayment fees are tiered which makes it a bit more reasonable:

• $5: Order value $99.99 or below
• $15: Order value between $100 and $999.99
• $30: Order value $1000 and above.

They also have notable merchants like Nike, Puma and Oppo.

OctiFi review

Next, we have OctiFi.

Their late payment fees are on the higher side as it is a flat $15 fee for the first $999.99 and goes up by $15 for every $1,000 increase in order value.

In terms of merchants, this is one of OctiFi’s weak points as I could hardly find any merchant I know.

Rely review

Rely is up next.

Their late payment fees are middle of the road as it can go anywhere from $1 – $40 based on order value.

In terms of merchants, Rely is a winner as it has e-commerce giant Qoo10 onboard.

Split review

Last but not least we have Split.

Good guy Split charges no late payment fees.

They also have brands like Dyson and The Straits Wine Company on board.

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This article was first published in Seedly.