Commonwealth Bank will roll out a new buy-now-pay-later service in a bid to compete with market leader Afterpay. The bank unveiled its new BNPL offering on Wednesday, which can be used anywhere debit and credit card payments are accepted. It will begin rolling out to eligible CBA customers from mid-2021.
When making a payment, customers will have the flexibility to use it for their everyday spending for smaller purchases as well as split over four instalments to help smooth payments for bigger purchases.
CommBank’s new BNPL features include:
Can be used anywhere Mastercard is accepted
A limit of $1,000
Use for everyday spend for transactions less than $100
Four fortnightly instalments for transactions higher than $100
A new card issued to customers’ digital wallet on their mobile, so no need for a physical card
No ongoing fees
No foreign exchange fees
Late fees of $10 per missed instalment repayment. And caps are in place to minimise the amount of additional fees charged
No additional merchant fees above standard merchant service fees
Does not provide access to cash advances or gambling
Available to CBA customers, the new BNPL links to a CBA bank account, with no ongoing fees and at no additional cost to businesses. With industry average BNPL costs to businesses at around 4% per transaction, BNPL fees are costing Australian businesses hundreds of millions of dollars a year. When customers shop with CommBank’s BNPL, businesses will pay no additional fee above standard merchant service fees.
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. CommBank’s BNPL will only be available to customers following internal and external credit assessments.
“Customer needs are evolving and this new BNPL offering is about giving customers more choice around how they choose to pay and when, depending on the option which suits them best,” said CBA’s Group Executive, Retail Banking Services, Angus Sullivan.
“Additionally 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,” Mr Sullivan said.