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60-, 90-, 120- DAYS PRODUCTS

Target Market Determination

NEXT PERIODIC REVIEW DATE: 15 DECEMBER 2023

 

Elevare Pay Easy Pty Ltd A.C.N. 634 728 591 (Elepay) (we, us or our) issues PayLater products to Australian Property Owners and we are committed to maintaining a consumer-centric approach throughout our product design phase, distribution and sales channels, and monitoring and review process.  This Target Market Determination (TMD) is effective as at 15 June 2023.  

 

1.  Purpose of this TMD

 

This TMD has been prepared by Elepay for its ‘60 Days Product’, ‘90 Days Product’ and ‘120 Days Product’ (collectively
Products or 60- 90- and 120- Days Products) in compliance with our Design and Distribution Obligations under Part 7.8A of
the Corporations Act 2001 (DDO).


This TMD sets out the class of consumer for which the Products have been designed having regard to the objectives, financial
situation and needs of consumers in the Products’ target market. It includes the following:

  • product features and class of consumers that fall within the target market;

  • distribution conditions, restrictions and sales practices that are likely to direct distribution of the Products to the target market;

  • information relating to reviews and monitoring of the Products and this TMD, including specifying timing for periodic reviews and review triggers (i.e., the events or circumstances which would trigger a review);

  • how we deal with significant dealings.

This TMD does not offer a comprehensive outline of the Products’ terms and conditions, nor is it a substitute for obtaining
independent legal or financial advice. Consumers should read the full terms and conditions before applying for any of the
Products.

2. Background to the 60- 90- and 120- Days Products

The 60- 90- and 120- Days Products are part of a suite of PayLater Products Elepay offers to Australian Property Owners who
anticipate that a monetization event will occur in the foreseeable future (primarily, the sale of real property but may also
include the refinance with a third-party lender).*


An “Australian Property Owner” includes:

  • any person or entity who is a registered proprietor to real property held in Australia (Owner);

  • any person or entity who is an appointed representative of an Owner (e.g. appointed attorney or executor of a deceased estate); or

  • any person or entity who has the express consent of the Owner to acquire the Products relating to the Owner’s property
    (for example, Elepay may require the registered proprietor to sign a Deed of Consent).

The primary objective of the 60- 90- and 120- Days Products is to allow these property owners the opportunity to better
manage their cash flow by allowing them to defer any upfront property-related expense until the occurrence of the
monetization event.*


The 60- 90- and 120- Days Products may be used by consumers to fund property-related expenses such as:

  • home renovation and improvement;

  • marketing and advertising;

  • property styling (to sell) and interior design;

  • deposit for a new purchased property;

  • repair and maintenance;

  • transportation, storage and removalist costs; and

  • other property-related works or expense,

       (Property-related Costs).

Elepay has partnered up with a number of styling companies, pre-listing companies, renovation companies and real estate
agents, who allow consumers to defer payment of any upfront Property-related Cost (payable by the consumer to the
Partner) via Elepay’s 60- 90- and 120- Days Products.
 

3. Class of consumers that comprises the Target Market

The 60- 90- and 120- Days Products are designed exclusively for consumers who meet our Eligibility Criteria and who wish to
defer payment of their upfront Property-related Costs on the basis that there is a foreseeable monetization event (Target
Market
).


The Target Market is subject to clause 6 of this TMD (Exceptional Consumers).

CLASS OF CONSUMERS WITHIN THE TARGET MARKET

The 60- 90- and 120- Days Products are for the class of consumers who:

  • falls within the definition of Australian Property Owner (see above) and require short-term lending solutions to pay Property-related Costs;

  • are seeking finance with flexible payment options, capped fees and interest for the term of the loan and the ability to make early repayments without additional charges;

  • meets Elepay’s Eligibility Criteria (set out below);

  • are not currently experiencing financial hardship;

  • are able to repay the loan amount by way of a single lump sum payment (at the end of the term) or 4 instalments over the last 45 days of the loan term without causing financial hardship;

  • are agreeable to repaying the loan (in full) upon the occurrence of the monetization event (even if this is prior to the scheduled repayment date(s)).

EXCLUDED CLASS OF CONSUMERS

The 60- 90- and 120- Days Products are not suitable for consumers who:

  • do not fall within the definition of Australian Property Owner;

  • do not otherwise meet Elepay’s Eligibility Criteria;

  • are going through bankruptcy or are experiencing, or are likely to, suffer from financial hardship;

  • are considered vulnerable persons (e.g. suffering from any form of cognitive impairment);

  • require an ongoing line of credit;

  • require a redraw facility;

  • are not comfortable with providing security over their real property.

Eligibility Criteria and Other Product Key Attributes

ELIGIBILITY CRITERIA

To be eligible for the 60- 90- and 120- Days Products, a consumer must satisfy the following requirements:

  • be an individual aged 18 years or above;

  • fall within the definition of Australian Property Owner (see above);

  • have an anticipated monetization event (for example, proposes to sell their property within the foreseeable future).
    Elepay may offer the product based on other monetization events (e.g. refinance from a third-party lender) subject to an individual assessment of the consumer’s circumstances.*

  • if the monetization event is the sale of the consumer’s property, then meets Elepay’s Property Sale Equity Analysis, which
    ensures that the consumer has suffcient net equity to repay the loan upon the sale of the consumer’s property without
    causing financial hardship. The consumer will not be subject to an income serviceability assessment.*
    Elepay will request details regarding the sale of the property (to ensure that there is suffcient net equity and the
    consumer proposes, or are actively taking steps, to sell their property). This includes, but is not limited to:

  • details of the proposed sale – e.g. listing date and expected sale price;

  • details of the appointed real estate agent and conveyancer or solicitor;

  • details of any registered co-owner(s);

  • a copy of a recent mortgage statement and supporting documentation regarding any other registered encumbrance);

  • a copy of the real estate agent sales appointment form;

  • a copy of the contract of sale (if available);

  • a copy of any valuation of the property (if available).

Elepay’s Property Sale Equity Analysis involves an analysis of the total net equity and forecasted sale value of the
consumer’s property based on the stage in which the sale of the property is at – that is, pre-listing, listed, sold
(conditional) or sold (unconditional).


In order for a loan application to be approved, the application must satisfy each of the following criteria:


(a) Total Net Equity Threshold – which sets the minimum thresholds an application must satisfy based on a
comparative ratio between the loan amount and total net equity (forecasted sale price less all related liabilities
and costs of selling the property); and


(b) Forecasted Sale Value Threshold – which sets the minimum thresholds an application must satisfy based on a
comparative ratio between the loan amount and forecasted sale price (e.g. minimum low value obtained from a
property valuation company or actual sale price).


The minimum threshold amounts for each criteria vary depending on the stage in which the sale of the property is at.
Elepay utilises its internal Funding Assessment Calculator to determine:

  • whether both the Total Net Equity Threshold and Forecasted Sale Value Threshold are satisfied; and

  • the maximum amount of funding a consumer may receive,

based on a number of variables such as, the stage of the monetization event, total net equity and forecasted sale price;

  • meet Elepay’s standard lending criteria including:

    • conducting a credit check on the consumer;

    • conducting an identity verification check on the consumer;

    • conducting an ownership check (including title search of the property);

    • conducting an online property valuation report (for the property);

  • require funding of a minimum amount of $100.00;

  • the maximum amount of funding a consumer may be eligible for is $500,000 (this is subject to stringent assessment of Elepay’s Property Sale Equity Analysis and other lending criteria (see further below)).

OTHER KEY PRODUCT ATTRIBUTES

Some key attributes of the 60- 90- and 120- Days Products include:

  • Structure

    • the 60-Day Product is structured so that the consumer enters into a loan with Elepay for a term of 60 days;

    • the 90-Days Product is structured so that:

      • the consumer enters into a first loan for a term of 28 days; and

      • the consumer has the option to enter into a second loan for 62 days (in which case, no fee or charges are payable under the first loan);

    • the 120-Days Product is structured so that:

      • the consumer enters into a first loan for a term of 58 days; and

      • the consumer has the option to enter into a second loan for 62 days (in which case, no fee or charges are payable under the first loan)

  • Purpose of loan - the loan must be used to fund Property-related Costs which are incurred by the consumer from an
    approved 60/90/120 Partner or a supplier (or other entity) of the Consumer’s choice (whether partial or in full);

  • Number of Instalments – the consumer has the option to choose between a single instalment (at the end of the loan
    term) or 4 instalments equally spread out across the last 45 days of the loan term;

  • Repayment– the consumer is required to repay the loan (in full) upon the earlier of (a) the settlement date (if the property
    is sold) and (b) the final repayment date (being for the 60-Days Product, 60 days from the Elepay Start Date, for the 90-
    Days Product, 90 days from the Elepay Start Date and for the 120-Days Product, 120 days from the Elepay Start Date).
    Early repayment is possible without penalty (see below);

  • Partner’s goods or services – if the loan relates to Property-related Costs incurred from an Elepay Partner, then the
    Partner has an obligation under its Partner Agreement with Elepay to supply goods and services to the consumer with
    reasonable care and skill and in accordance with the supply terms between the Partner and the consumer. If the
    Consumer is incurring Property-related Costs from a supplier of the Consumer’s choice, then the Consumer's Supplier will
    be solely responsible for the products or services provided to the consumer.

  • Fee Structure – the Fee structure for the 60- 90- and 120- Days Products is as follows:​​

For the 60-Day Product:​

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For the 90-Day Product:

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For the 120-Day Product:

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Note: The total interest payable is calculated on a daily basis and varies depending on the actual term of the
consumer loan.


For the 90- and 120- Day Products, if the consumer exercises the option to enter into Loan 2, then no fee or interest
is payable by the consumer under Loan 1.

  • Default/Late fee – the consumer will be liable to pay a late interest of 0.0695% per day compounding daily (of theoutstanding amount) and a late fee of 0.25% every 30 days (of the outstanding amount) if the consumer has not repaid an amount owing by the due date. This is subject to any claim the consumer may have for financial assistance;

 

  • Other fees – other fees may apply such as a missed payment fee ranging from $15.00 to $25.00 (depending on the nominated method of payment) and title registration fee ranging from $350 to $1,100 (depending on whether a registered security is provided with respect to the consumer’s property);

 

  • Minimum Credit Limit – the minimum amount of funding provided is $100.00;

  • Maximum Credit Limit – the maximum amount of funding a consumer may be eligible for is $500,000. Loan applications of a higher amount are subject to a more stringent credit assessment and approval process. This includes:

    • the application must satisfy a higher minimum Total Net Equity Threshold and Forecasted Sale Value Threshold;

    • The application must satisfy a higher minimum Illion Credit Report threshold;

    • in certain circumstances, funding may only be granted upon satisfactory evidence that a monetization event will unconditionally occur within the foreseeable future (e.g. property is unconditionally sold or finance with a third-party lender has been pre-approved). Additional supporting documentation regarding the monetization event will be required;

    • loan documentation must be completed via paper-form and all original transaction documentations returned to Elepay;

    • Elepay may require the consumer to produce a Certificate of Independent Legal Advice;

    • a more stringent review of all existing liabilities and debt relating to the consumer and the consumer’s property will
      be conducted. Further supporting documentation may be required (such as written confirmation from any existing
      third-party lender).

  • Early repayments – Consumers have the ability to make an early repayment of the loan without any additional charge or exit fee;

  • Security – the consumer will be required to provide a charge over the consumer’s real property (which may or may not be registered against title to the property).

4. Consistency between the Target Market and the Products Key Attributes

Set out below is our assessment of the likely objectives, financial situation and needs of the Target Market, and the key
product attributes of the 60- 90- and 120- Days Products.

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5. Distribution Channels and Conditions

APPROPRIATENESS STATEMENT

Elepay considers it is reasonable to conclude that if the 60- 90- and 120- Days Products are issued to a consumer in
accordance with the distribution conditions in this TMD it would be likely that the consumer is in the Target Market and it
would likely be consistent with their likely objectives, financial situation and needs. This determination is based on the
assessment above regarding the consistency between the Target Market and the Products’ Key Attributes, which incorporates
past outcomes and feedback of the Products’ consumers and Partners.

DISTRIBUTION CHANNELS AND CONDITIONS

Distribution Channel: A consumer may apply for the 60- 90- and 120- Days Products via the following channels:

  • if the Property-related Costs relate to any of our approved 60-,90- and 120- Days Partners (Distributors):

    • Elepay will be sent a Partner lead form (outlining details of the proposed loan); and

    • the Consumer will be required to submit an online loan application via Elepay’s website; or

  • if the Consumer is seeking a loan (not relating to our Distributors), then the Consumer will be required to submit an online loan application via Elepay’s website.

Please see clause 6 below for the distribution channel applicable to ‘Exceptional Consumers’.


We have oversight over how the 60- 90- and 120- Days Products are promoted and issued.


We regularly monitor our Partners’ websites to ensure they contain:

  • no misleading information;

  • all relevant disclosures and warnings required by law;

  • an easy to follow process during which the consumer is given informed choices at every stage.

Our own website contains:

  • no misleading information;

  • all relevant disclosures and warnings required by law;

  • an easy to follow process during which the consumer is given informed choices at every stage.

The distribution conditions relating to the marketing and promotion of the 60- 90- and 120- Days Products are specified in the table below.

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6. Exceptional Consumers

Elepay has an additional eligibility and assessment criteria for the 60-, 90- and 120- Days Products for certain consumers
who:


(a) are incurring property-related expenses from our partner called Megasealed; or
(b) wish to defer payment of upfront Property-related Costs but do not have a foreseeable monetization event,

(Exceptional Consumers).


These Exceptional Consumers are still consumers wishing to defer payment of their Property-related Costs and must still meet
our Eligibility Criteria. However, the diFFerences between these consumers and our standard 60-, 90- and 120-Days consumers
are as follows:

  • There is no foreseeable monetization event – as such, Elepay will not request information regarding the sale of the consumer’s property; and

  • Exceptional Consumers will be subject to an additional assessment criterion, being Elepay’s Income Serviceability Assessment.

 

Elepay’s Income Serviceability Assessment is conducted in addition to the Property Sale Equity Analysis and is a credit
assessment based on the consumer’s household net income. Elepay must be satisfied that the consumer has the ability to
make the required repayments without experiencing financial hardship.


Exceptional Consumers will be required to:

  • complete an income serviceability form outlining their net household income and expenses;

  • provide supporting documentation for any claimed source of income (e.g. 2 recent pay slips); and

  • disclose any existing (or anticipated) circumstance or event which may affect their ability to make the required repayments.


Elepay’s Finance Specialist Team assesses any applications that are subject to an Income Serviceability Assessment, which
includes ensuring these applications meet Elepay’s internal serviceability assessment calculator.

7. Periodic Review and Review Triggers

To ensure that the 60-, 90- and 120- Days Products continue to meet the objectives and needs of their Target Market, it is
necessary that we regularly review this TMD. This includes consideration of:

  • 60-, 90- and 120- Days Products and Target Market;

  • Eligibility Criteria; and

  • distribution channels and conditions.

In reviewing the above, we collect and analyse data relating to:

our eligibility and application phase;

  • Partner feedback and our online Partner portal;

  • disputes between the Partner and consumer relating to the Partner’s services and products;

  • sales information;

  • customer information;

  • payment information (including funds recovered and not recovered);

  • feedback and complaints (from consumer and Partners);

  • default information and extended repayment terms;

  • whether the consumer is utilising funds for payment of Property-related Costs;

  • property sale status (including the amount of property withdrawn from sale);

  • market conditions (including the effect of interest rate changes and market sentiment).

These reviews will be conducted periodically and in response to review triggers and other events or circumstances that would
reasonably suggest this TMD is no longer appropriate.

PERIODIC REVIEW PERIOD

We will conduct our next review on the Next Review Date and periodic reviews at least quarterly from the Next Review Date.

 

REVIEW TRIGGERS

In addition to periodic reviews, we will review this TMD in response to a review trigger or other event or circumstance that
would reasonably suggest this TMD is no longer appropriate. The occurrence of a review trigger or other such event or
circumstance will trigger an immediate review of this TMD and may result in Elepay changing the Target Market, the design or
distribution of the 60- 90- and 120- Days Products or ceasing to offer one or more of the Products.


These review triggers are:

 

  • we receive a substantial number of complaints from consumers or Partners about any of the Products (i.e., if complaints about the Product from active 60-, 90- or 120- Days Product consumers or Partners increases by 10% or more in a quarter);

  • a substantial number of consumers are:

    • if the monetization event is the sale of the property, withdrawing their property from sale and no longer intends to sell the property (i.e., if over 15% of active 60-, 90- or 120- Days Product consumers fall within this category);

    • if the monetization event is the sale of the property, unable to sell their property within the loan term period and seek extension of the repayment date (i.e., if over 15% of active 60-, 90- or 120- Days Product consumers fall within this category);

    • experiencing negative repayment history, including missing a scheduled repayment (i.e., if over 15% of active 60-, 90-or 120- Days Consumers fall within this category);

    • seeking financial hardship relief (i.e., if over 10% of active 60-, 90- or 120- Days Product consumers fall into this category);

    • there are material changes to the key attributes of the 60- 90- and 120- Days Products which may result in one or more of the Product no longer being appropriate for the Target Market;

    • there is a material change in our distribution channels such that our distribution conditions requires variation;

    • there are a substantial number of complaints relating to the 60- 90- and 120- Days Products or services provided by the Partner (e.g. delay in works completed by the Partner) (i.e., if complaints about our Partners from active 60-, 90- or 120-Days Product consumers increases by 10% or more in a six month period);

    • change in regulatory, legislative or market conditions which may materially affect the product or any matter relating to this TMD;

    • the use of Product Intervention Powers, regulator orders or directions about or relating to the 60-, 90- or 120- Days Product’s key features, target market or distribution strategy;

    • a significant dealing has occurred (or is likely to occur). A significant dealing occurs when the distribution of the 60- 90-and 120- Days Products (including conduct by our distributors) significantly differs from any condition or expectation set out in this TMD;

    • any other matter that may result in this TMD not being appropriate.

8. Reporting

We will report to ASIC within ten (10) business days should we have reasons to believe that a significant dealing has occurred
either by us or via our distributors. Our distributors are also obliged to inform us of any significant dealing events, and we have
arrangements in place to monitor and review our distributors’ compliance with this obligation.

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9. Records

We will keep records of any complaints, action taken or review of any matters related to this TMD.
This includes, but is not limited to:

  • Product design and development matters;

  • Data collected and analysed for TMD reviews;

  • TMD review meetings;

  • Consumer and distributor feedback; and

  • Review of distribution channels and conditions.

10. Contact

Should you have any queries regarding this TMD, please contact us at legal@elepay.com.au or 1300 019 417.

* Please see clause 6 of this TMD (Exceptional Consumers) for circumstances when the 60-, 90- and 120- Days Products may also be suitable where there is no monetization event.

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