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. 

Image Source:  Coffee photo created by jcomp – www.freepik.com

Source:

[1] (2020) “ASIC releases latest data on buy now pay later industry” ASIC [online] available from:

https://asic.gov.au/about-asic/news-centre/find-a-media-release/2020-releases/20-280mr-asic-releases-latest-data-on-buy-now-pay-later-industry/

 

 

Karandeep V

Karandeep was born in Pune, Maharashtra, an upcoming metropolitan city in the Western region of India. While most members of his family are engineers, he had different ideas. He was more inclined toward exploring the non-technical aspects of a business, which is why he studied Bachelors of Business Administration at Symbiosis International University, Pune.  Having said that, his love for new and upcoming technologies remained intact, which is why he has written extensively about technology throughout his career. After a brief stint with a gaming company at the beginning of his career, he discovered that his love for writing was not temporary.  Being a tech geek, he always liked installing and playing around with new applications on his mobile devices and the home desktop. He was fascinated by how technology can simplify even the most mundane and complex tasks with just a few commands. He keeps a close eye on how businesses use different tools to streamline their operations to boost productivity and efficiency.  At ToolsMetric, he writes product reviews that cover the main features and specifications of different enterprise applications. The sheer amount of innovation and hard work that goes into building these tech solutions is one of the reasons why Karandeep loves reviewing these tools. Besides product reviews, he also writes interesting news articles and blogs that track the latest developments in the tech industry.  When he is not writing, you can find him rooted to his seat playing video games, watching movies, or supporting his favorite football team. Since his childhood, he has always loved to travel and explore new places. Traveling is a major part of his life due to a myriad of reasons such as experiencing new cultures, food, and traditions. His other hobbies include playing football, cooking, and running.  You can find him on LinkedIn here.

We will be happy to hear your thoughts

Leave a reply

ToolsMetric
Logo
Compare items
  • Total (0)
Compare
0