Suncorp Bank has become the latest lender to announce that it will be launching a new interest-free buy now, pay later (BNPL) offering for customers.
Run in partnership with Visa, PayLater will enable customers to pay for goods/services between $50 and $1,000 wherever Visa is accepted, and repay the amount in four fortnightly instalments.
Customers can choose to change their repayment day by up to six days.
While there will be no ongoing fees or foreign exchange fees for international purchases, there is a fee for late repayments. Suncorp said there would be a two-day grace period for missed repayments, otherwise customers would face a $10 late fee per purchase.
Eligible customers will be able to apply online or via the Suncorp App, with the bank undertaking a credit check to determine customer eligibility.
As well as being offered as a digital card via the Suncorp App in November, the PayLater card will also be launched as a physical debit card in what is said to be “a first for the Australian market”.
As such, customers would be able to use their green Suncorp Visa debit card to pay for goods in full, or the new yellow Visa Debit card for PayLater, if they wish to pay for goods or services using BNPL.
There will be no additional cost to retailers for accepting PayLater, according to the bank.
The new PayLater card and all Suncorp Bank’s debit cards issued from mid-September will be made from 82 per cent recycled material.
Announcing the incoming offering, Suncorp Bank chief executive Clive van Horen said that PayLater had been designed to give customers more choice around how they pay.
“Some customers prefer to use credit cards, while others want simple, short-term payment options from a trusted and secure bank,” Mr van Horen said.
“PayLater is available via the Suncorp App which can help [consumers] budget easily since everything’s in one place and there’s no need to download separate apps.
“This solution is also a win for Australian businesses, many of whom are doing it tough right now as we learn to live with COVID-19. Our PayLater offering eliminates additional costs to those businesses who are currently paying millions of dollars in traditional BNPL fees.”
Julian Potter, Visa’s group country manager for Australia, New Zealand, and South Pacific, added: “The buy now, pay later sector is rapidly evolving as consumers increasingly look for flexibility and choice in the way they pay, both in-store and when shopping online.
“We’re excited to partner with Suncorp to deliver a seamless and secure digital payment experience that offers customers the convenience of paying in instalments anywhere Visa is accepted and enables more businesses across Australia to grow.”
More lenders turn to BNPL
Suncorp is the latest lender to announce a new BNPL offering, as more banks look to take on the BNPL giants, such as Afterpay (set to be acquired by US payments fintech Square), Zip and Klarna.
The Commonwealth Bank of Australia recently launched StepPay, Westpac’s New Zealand arm entered into a joint venture agreement with BNPL provider humm group in July, rolling out a product called bundll to the Kiwi market, while Citi is set to release Spot. in October,
A recent NAB report showed BNPL became the fourth-most common type of debt held by consumers in the March quarter, maintaining a hold on 18 per cent of Australians. Indeed Latitude’s half-year results show that the number of customers using its new BNPL product – LatitudePay – increased 73 per cent to 458,000 open accounts, with the company set to launch LatitudePay+ (a BNPL product that will allow customers to make bigger purchases of up to $10,000) in the next half.
The growing interest in BNPL payment offerings come amid a growing uptake and interest in BNPL usage in Australia.
According to ASIC’s report 672, BNPL arrangements rose by 90 per cent between the 2017-18 and 2018-19 financial years alone, when the number of BNPL transactions hit 32 million.
[Related: CBA launches BNPL offering]
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.