The Afterpay Ltd (ASX: APT) share price is having a great day on the ASX. Unfortunately, not everyone is as happy about the buy now, pay later service provider as the market seems to be.
According to reports in Guardian Australia, Afterpay's recent foray into hospitality could have the potential to cause financial harm to some Australians.
At the time of writing, the Afterpay share price is $120.47, 3.19% higher than its previous close.
Let's take a closer look at today's news regarding Afterpay.
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Afterpay share price gains despite regulatory worries
The Afterpay share price is in the green today, but some commentators have expressed concern the law is failing to protect vulnerable consumers against BNPL services.
This follows hospitality group Australian Venue Co announcing its partnership with Afterpay last week.
Together, the two companies will launch 'Dine Now, Pay Later' in 160 of Australian Venue Co's establishments. The payment service will be available to pub-goers by the middle of this month.
Australian Venue Co's CEO Paul Waterson commented on the addition of the BNPL giant's service, saying:
Our customers have been clear. We know what they want, and we're happy to offer them more flexibility, especially as they shift away from credit cards.
However, Financial Counselling Australia's campaign director James Hunt told the Guardian Australia the BNPL sector is "like the wild west without a sheriff":
We totally understand why people would be using these products when you can't afford food… But you don't have consumer protection like you do with credit cards or personal loans… We're seeing more people becoming overcommitted.
According to the publication, both Hunt and the Consumer Action Law Centre's director of policy and campaigns, Katherine Temple, have called on the federal government to place greater regulations on BNPL services.
Australian Venue Co maintains that Afterpay doesn't trap vulnerable customers and is, instead, a budgeting tool.
Additionally, the company states Afterpay will only be a payment option for food and drink purchases at its establishments. It says any potential concerns surrounding the use of Afterpay for in-venue gaming or wagering are unfounded.
Finally, a trial conducted at Australian Venue Co's Mr Yum found 90% of purchases using Afterpay were for food while 10% were payments for alcohol.
The concerns have emerged just days after the latest news of Square Inc's (NASDAQ: SQ) takeover of Afterpay was released.
Last week, Square's shareholders voted in favour of providing scrip for the $39 billion takeover, now set to go ahead early next year.
The Afterpay share price gained 2% on the back of the news.
