Australia's largest buy-now pay-later (BNPL) player Afterpay (ASX: APT) has coupled up with Westpac (ASX: WBC) today to create a new digital banking platform, in a move that sent the fintech's share price past the $100 mark today.
Not one to be shown up by its competitor, Zip Co (ASX: Z1P) has also made a major announcement today, launching a new product that will allow customers to use the BNPL service anywhere that accepts Visa.
Under its partnership with Westpac, Afterpay will introduce savings accounts and cash flow management tools to its more than 3 million customers in Australia.
The new services, available from FY21, will be facilitated by Westpac's new digital bank-as-a-service platform, and sees the BNPL company move into the world of money management.
Users of the Afterpay and Westpac product will be able to access their new savings account to conduct the majority of activities they would normally with a traditional bank account, like paying bills, withdrawing cash, and budgeting.
In addition, the company says by linking the new services to a user's existing Afterpay account insights will be delivered into how they prefer to manage their finances and what their savings goals are.
Westpac's digital bank-as-a-service platform uses cloud-native technology from 10x Future Technologies.
"The introduction of savings accounts and budgeting tools offers new customer benefits that continue to build on our core principle of encouraging responsible spending and enabling financial wellness," said Afterpay CEO and managing director Anthony Eisen (pictured left).
"We are excited to leverage the bank-as-a-service platform to provide customers with a different way to manage their finances, without relying on traditional banking services.
"We applaud Westpac's foresight in curating this innovative digital platform and welcome their desire to partner with Afterpay to meet the changing needs of a powerful next generation of customers."
Westpac CEO Peter King said the partnership reflects the bank's commitment to innovation.
"Fintech innovation is changing banking in important ways and our new digital banking platform is part of our long-term strategy to support this trend and better respond to changing customer needs," said King.
"The platform allows us to combine our banking experience with the innovation of our partners to support new customer experiences.
"We look forward to working with Afterpay to deliver new products and services."
Zip goes everywhere with Visa
Afterpay's closest competitor in the Australian BNPL scene Zip Co has today announced the launch of Tap & Zip, a new product that enables Zip Pay users to shop anywhere that accepts Visa.
The company says the product will significantly expand the options available to its customers, with just 13 per cent of stores in Australia currently able to accept BNPL options.
Zip says the launch of Tap & Zip comes after a strategic product review of its current instore payments experience which to-date has been based on barcode and QR code technology.
Zip hopes the new contactless payment method will be easier to use both for customers and merchants.
"BNPL has seen phenomenal growth over the last few years, as customers switched traditional forms of credit for flexible, digital alternatives. However, until now that growth has been restricted by a clunky instore checkout experience and limited acceptance," said Zip co-founder and CEO Larry Diamond.
"We continuously hear from Zip customers that they want to use their digital wallet to pay for everyday purchases like groceries and petrol, or to buy products and services from merchants that don't accept BNPL.
"As a customer-obsessed organisation, we are excited to announce Tap & Zip, which completely changes the game, enabling Zip to compete with the credit card at every checkout in Australia."
To facilitate Tap & Zip the company has been granted a Principal Issuer licence with Visa and will leverage Marqeta's open-API card-issuing platform to create Zip-branded virtual cards in real-time.
This virtual card will allow users to shop at any instore or online retailer where Visa is accepted and can be added to selected digital wallets including Apple Pay and Google Pay.
"Tap & Zip customers can enjoy the choice and flexibility that Zip provides, and know their transactions are backed by Visa's global acceptance and multiple layers of security," said Visa group country manager for Australia, New Zealand and South Pacific Julian Potter.
"Visa is proud to bring its scale and capabilities to enable fintechs like Zip to develop new payment solutions and to reach their global potential."
Business News Australia
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support