Buy now, pay later providers such as Afterpay have surged in popularity.

They see users paying nothing up front, with usually four equal payments then deducted each fortnight.

But the four big banks have launched an assault on the rivals, accusing them of shirking regulations as the banks face the backlash of a royal commission.

Former trade and competition minister and Afterpay economic adviser Craig Emerson says “there isn’t any great problem”.

“The banks are anxious about the decline in credit card usage, millennials in particular like the Afterpay model.”

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