Commonwealth Bank Reveals Plans of Launching its own BNPL Offering
Commonwealth Bank of Australia revealed that it is set to roll out its own Buy Now Pay Later (BNPL) offering around mid-year. CommBank’s entry into the BNPL sector means that its customers will have more flexibility around when and how they pay.
According to a report published by the Australian Securities and Investment Commission (ASIC), BNPL transactions in Australia witnessed massive growth, from $16.8 million in 2017-2018 to over $32 million in 2018-2019. As a result of the increasing BNPL transactions, the BNPL sector has grown at an impressive rate over the past few years.
More about CommBank’s BNPL product
The new BNPL product is available to eligible CommBank customers, links to the CommBank bank account, and does not have any additional costs or ongoing fees. However, customers will have to pay the regular Mastercard, and account fees.
The average BNPL cost to retailers is around 4 percent on every transaction and can compound to millions of dollars every year for Australian businesses.
The BNPL offering can be utilized wherever Commbank debit or credit cards are accepted across Australia. It has a limit of $ 1,000 and is primarily developed for transactions of or less than $100.
Commonwealth Bank of Australia (CBA) is one of the popular investors in Klarna, a Swedish BNPL service provider which entered Australia in 2020. Since its Australian debut, Klarna has a customer base of over half a million local customers. The BNPL alternative will be available in conjunction with its existing Klarna BNPL product.
According to Angus Sullivan, CBA Group Executive, Retail Banking Services, customer requirements are changing rapidly. The new BNPL product is all about providing customers with more flexibility around how they choose to pay and when based on an alternative that suits them.
He said, “When making a payment, customers will have additional flexibility to use it for their everyday spending for smaller purchases as well as split over four installments to help smooth payments for bigger purchases.”
Customer eligibility criteria
CommBanks revealed it will keep a track of customer credit eligibility with its cutting-edge digital payments technology. Every customer who wants to apply for CommBank’s BNPL offering will have to carry evidence of regular salary paid into the bank to ensure credit assessments and cover BNPL installments.
Mr. Sullivan said that as one of the most established digital banks in Australia, CommBanks is best positioned to provide its customers a responsible BNPL option.
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Source:
[1] (2020) “ASIC releases latest data on buy now pay later industry” ASIC [online] available from:
