Finance Breaking news CommBank steps into BNPL fray last financial news
Breaking-Finance.Com - Commonwealth Bank of Australia has waded into the competitive buy now, pay later market, competing with local juggernaught Afterpay, and Klarna, in which it has invested $350 million.
Breaking-Finance.Com - Commonwealth Bank of Australia has waded into the competitive buy now, pay later market, competing with local juggernaught Afterpay, and Klarna, in which it has invested $350 million. Set for roll-out to its customer base of four million consumers in mid-2021, CommBank's product will undercut Afterpay by not charging merchants more than their current card transaction fees to accept instalment payments.With industry average BNPL costs to businesses at around four per cent per transaction, BNPL fees are costing Australian businesses hundreds of millions of dollars a year, says CBA's group executive, retail banking services Angus Sullivan."We know transaction costs are important considerations for businesses. Unlike some other BNPL providers which may charge a high fee, there are no additional fees to businesses when customers choose to pay with CommBank’s BNPL,” he says.Available for all transactions between $100 and $1,000, payments are split into four instalments payable each fortnight. Eligible customers will be able to apply for the product where they show evidence of a regular salary deposited into a CBA transaction account which can cover repayment instalments and will only be available to customers following internal and external credit assessments.
. Again, this is a step change from Afterpay, which only uses its own algorithms to assess customer risk on every transaction.Says Sullivan: “As the leading digital bank in Australia, we believe we are best placed to offer our customers a prudent and responsible BNPL option based on the trends and insights sourced from real time transaction data over many years.” Afterpay scores by providing rich transction data to merchants for lead generation. The firm has also gained the support of CBA rival Westpac, with the aim of providing bank-like services through Westpac's new banking-as-a-service platform.As for CBA's much-trumpeted relationship with Klarna, the new product will provide an added element of competition.“Our new BNPL service complements and underscores our investment in Klarna and our joint venture business here in Australia which offers both CBA and non-CBA customers huge opportunities to connect with domestic and international retailers," says Sullivan. "Our latest investment in the company is an expression of our confidence in its future both worldwide and in Australia and New Zealand.”
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