Buy Now Pay Later Giant, Afterpay, Announces Partnership with Westpac
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Buy Now Pay Later Giant, Afterpay, Announces Partnership with Westpac

Angelica Silva

Angelica Silva

26/03/2021 • 3 minute read

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Through technology and data, Afterpay and Westpac are partnering-up to build stronger and better-quality customer relationships.

In a strategic shift towards banking, Australia’s most prominent player in the buy now pay later (BNPL) game, Afterpay, is the first business to partner with Westpac to use their “banking as a service” solution.

In bundling their services together, Afterpay’s 3.2 million Australian customers will be able to access Westpac’s transaction and savings accounts, as well as other money management tools.

Announced this morning (October 20), the partnership is set to go live through Westpac’s digital banking platform in the second quarter of 2021.

CEO of Westpac, Peter King, said the partnership has given the big four bank the opportunity to piggy-back onto Afterpay’s innovation, while the BNPL service will be able to take advantage of Westpac’s infrastructure.

“This collaboration reflects our strategy to meet the changing needs of customers and demonstrates our desire to partner with differentiated business models that provide alternative ways for consumers to spend and manage their finances,” Mr King said.

“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.”

What will they be offering?

Afterpay and Westpac plan to launch a new savings account that will enable users to do the bulk of their money management activities. This includes paying bills, withdrawing cash, and budgeting. The savings account will also allow consumers to set savings goals and be rewarded for good saving behaviours.

The concept behind the new money management service is to complement the existing business models of both providers by offering additional, customer-centric alternatives to conventional banking products.

Based on their current offering, Afterpay believes they are in a strong position to understand customers’ pay cycles and other spending habits, allowing them to guide users on managing payments within this new account.

CEO and Managing Director of Afterpay, Anthony Eisen, said the partnership will allow its customers to manage their money “more seamlessly”

“In deepening our relationship with our customers, we will gather greater insights into how they prefer to manage their finances and better understand their savings goals,” said Mr Eisen.

To address increasing concerns surrounding the BNPL industry fuelling unsustainable debts, Afterpay said that linking the banking services to an existing Afterpay account “will deliver further insight into how customers prefer to manage their finances, what their savings goals are, and how responsible spending behaviour can be further encouraged and rewarded.”

The future is fintech

Mirroring the grandeur of Afterpay’s news is Westpac’s November 2019 announcement to partner with 10x Future Technologies, a UK-based cloud banking provider, to build a new core banking stack that allows third parties to offer Westpac banking products through APIs.

Afterpay will become the first customer of its 10x Future Technologies cloud platform.

“This has the potential to facilitate new revenue streams over time, without [us] needing to develop traditional banking or credit products,” the company said.

As the nation’s big banks scramble to find new ways to appeal to young, tech-savvy customers who don’t use credit cards, this venture between Afterpay and Westpac is just the latest example of the industry's widespread push into fintech.

Earlier this year, Commonwealth Bank partnered with Swedish digital payment provider, Klarna, to launch it’s services here in Australia.

With many of the big banks looking to win back market share with young Australians, it’s likely we’ll be seeing more and more of these partnerships in the coming years.

 

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Angelica Silva

Written by Angelica Silva

Angelica Silva is a contributing writer for Oiyo. Over the years, Angelica has worked as a journalist for a range of publications with her work appearing in SBS, Business Insider, and Brown Girl Magazine. She has a Bachelor of Journalism and Arts from the University of Queensland.

More about Angelica Silva

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