If you’re an e-commerce store owner with Afterpay added to your Shopify store, you might be curious about how much your customers can spend with Afterpay on your website and how to manage all these payments effectively.
Well, you’re in the right place. In this article, we’ll discuss why the Afterpay transaction limit is $1,500, as well as some other questions about this ‘buy now, pay later’ service.
How Does Afterpay Work?
Afterpay is a way to purchase goods that’s quickly growing in popularity — you can even buy groceries with Afterpay. If you’re not familiar with how it works, here’s a brief overview: Afterpay is a service that allows your customers to buy items from your store and then pay for them over four equal installments, interest-free.
The first installment is due at the time of purchase, and the remaining three installments are deducted automatically from your customer’s credit or debit card every two weeks. There’s no interest or added fees for using Afterpay, as long as the customer makes their payments on time. If a payment is missed, however, late fees may apply. This late fee is usually $10, and if a customer doesn’t make a payment within seven days, an additional $7 is applied as a penalty.
Note: Make sure you integrate Afterpay with Xero so all Afterpay-related transactions are accurately accounted for.
What Is the Highest Afterpay Limit?
The highest a customer can spend with Afterpay in a single transaction is $1,500. In addition, customers can hold an outstanding limit of $2,000 per Afterpay account. However, the spending limits on Afterpay are variable and depend on a variety of factors. These include, but are not limited to:
- The customer’s spending history with Afterpay;
- Whether the customer has made any late payments with Afterpay in the past;
- The frequency of on-time and late payments;
- Payment source.
For example, if a customer has a history of making late payments with Afterpay, they may have a lower spending limit than someone who has always made their payments on time. Or, if someone has just created an Afterpay account, their spending limit may be lower than someone who has been using Afterpay for a while.
How to Increase Your Afterpay Limit
As you can see, there are a range of factors that affect the maximum amount a customer can spend with Afterpay. If you’re an Afterpay customer and you want to increase your spending limit, the best thing to do is to make sure you always make your payments on time. The more you use Afterpay and prove that you’re a responsible borrower, the higher your spending limit will be.
In addition, it may be helpful to try and pay off your Afterpay balance as quickly as possible. This will free up more of your limit so you can make larger purchases in the future.
What Happens When I Can’t Pay Off My Afterpay Balance?
If you’re struggling to pay off your Afterpay balance, the first thing you should do is contact Afterpay. They may be able to work out a repayment plan with you so that you can pay off your balance over time.
It’s also important to remember that if you miss a payment, late fees will apply. So, if you’re having trouble making a payment, be sure to contact Afterpay as soon as possible so that you can avoid any additional fees.
Is It a Good Idea to Turn off Automatic Afterpay Payments?
Afterpay automatically deducts payments from your credit or debit card every two weeks, but some people may prefer to make their payments manually. These customers can turn off automatic Afterpay payments by removing all credit and debit cards from their Afterpay account.
However, this can prove to be counterproductive when it comes to increasing your maximum Afterpay limit. When you turn off automatic payments, you’re more likely to miss a payment and damage your payment history.
The highest Afterpay limit is $1,500 per transaction and customers can hold a maximum of $2,000 as outstanding balance, but these limits are variable and depend on a variety of factors such as payment history and frequency of on-time payments. If you’re an Afterpay customer and you want to increase your spending limit, the best thing to do is to make sure you always make your payments on time.
For more related information, check out our recent post on receiving funds from Stripe.