Loading But under legislation changes published in November, Perceptive and its parent company Illion, along with betting agency Betfair and three other companies including marketing giant ACXIOM, were also granted access to the data on millions of Australian voters as part of the anti-money laundering and counter-terrorism financing push. ACXIOM, which says "it solves critical use cases for omnichannel, people-based marketing," and Betfair, an online gambling company, have no relationship with Illion or Afterpay. The Australian Electoral Commission would not comment on whether the use of the data by the companies was appropriate as the anti-terrorism and money-laundering legislation was administered by the Attorney-General's Department. The Attorney-General's Department said Home Affairs was responsible for the legislation. Home Affairs did not respond to requests for comment. Using electoral data for commercial purposes attracts a fine of up to 1000 penalty units - equivalent to $210,000 - according to the Australian Electoral Commission website. The AEC has strict restrictions on who can access the data, including members of parliament, political parties, approved medical researchers, and public health programs.

Illion initially denied it used electoral data and did not respond to requests for comment about what data it did provide to Afterpay. But in a subsequent statement it said for customers with "[anti-money laundering obligations] we may access electoral data to verify identities." "We do not disclose details of any commercial arrangements with our customers," the spokesman said. Afterpay said it did not access the data directly, use the electoral data in its algorithm or for commercial purposes and that it was used as part “of external identification purposes.” The Illion-obtained electoral data is passed on to Afterpay and combined with other external data bases including billing and shipping addresses, debit or credit card information, IP addresses and phone numbers. "Decisions are made on better data and on a real-time basis," said Afterpay economic adviser Craig Emerson. "The banks, traditional credit products and even others in the sector either don’t have the ability or the inclination to undertake checks of this nature."

Afterpay also stores and examines the device a user is transacting from, to create a "device fingerprint" of its customers. Loading Afterpay's credit check process was in the spotlight at a Senate inquiry in Brisbane on Tuesday, where both Afterpay and rival Zip offered different visions on government regulation in the buy-now-pay-later sector that has exploded across Sydney and Melbourne's shopping centres. Afterpay has already moved into the US market and is now expanding to the UK where it likely to face tougher regulation. Chief executive Nick Molnar told the inquiry he could see how it’s easier to regulate Afterpay like traditional credit products. The move would compel them to run income and expenses checks on customers and move away from their own digital formula.

"But, that is a blunt and simple solution to a more complex issue and one that risks stifling innovation," he said. "You can think of Afterpay as a budgeting tool or a modern-day lay-by. We have never been defined as credit, we never charge interest. That’s because we make the vast majority of our money from retailer fees." The company's shares jumped 14 per cent to $16.14 last week, before falling by 1.7 per cent over the course of the hearing to close at $15.25. They have risen by 115 per cent in the last year, giving it a market capitalisation of about $3.7 billion. ACXIOM and Betfair were contacted for comment. You can contact the author via the encrypted messaging app Signal on +61411463731