Recently Westpac allowed Australia’s king of BNPL, Afterpay, into its tent. (Westpac supplied Afterpay a white label product so it could add transaction and savings accounts to its services.)
CBA appears set on locking Afterpay out.
Westpac’s decision to form some kind of alliance with Afterpay looks more like an offer of a white flag to BNPL – along the lines of ‘if you can’t beat ’em make some money out of ’em’.
Perhaps the biggest threat provided by CBA’s entry into BNPL is what it will mean for future regulation of the sector. CBA will undertake credit assessments of its customers – much like Zip already does. But Afterpay doesn’t perform credit checks.
Industry experts believe this will hasten regulatory moves towards having all BNPL operators captured under consumer credit laws.
CBA helpfully highlighted the importance of credit checks, saying its market research revealed the emergence of consumers using multiple BNPL services.
It seems like a clever strategic move and one that should hold some appeal for CBA customers because it will be a product linked to an existing digital wallet.