Suncorp Bank has now officially entered the buy now, pay later (BNPL) space, with its product – named PayLater – launching on Monday (29 November).
First announced in September, the interest-free, Visa-partnered offering is said to be available at more than 70 million merchant locations worldwide wherever Visa is accepted, and will enable purchases of goods and services between $50 and $1,000 with four fortnightly payment instalments.
Suncorp Bank has also stated that PayLater is available for free via the Suncorp app.
The launch of PayLater comes after research commissioned by the non-major bank noted a sense of confidence among those using BNPL in their finances.
Following a survey conducted by Kantar in October of 2,000 Australians aged 18 and above, 46 per cent of respondents expressed that using BNPL allowed them to budget more effectively.
Speaking of the release of PayLater and its lack of cost to customers repaying on time or to participating businesses, Suncorp Bank chief executive Clive van Horen said he believes this was a positive for businesses.
“This is a win for Australian businesses who are currently paying millions of dollars in traditional BNPL fees, on top of other cost pressures,” Mr van Horen said.
“Eligible customers now have the option to head in store with their physical PayLater Visa debit card or to use it online via their digital wallet.”
Visa group country manager for Australia, New Zealand and South Pacific Julian Potter said: “The demand for buy now pay later offerings continues to grow and we’re delighted to partner with Suncorp Bank to enable this innovative, digital payment experience through our trusted network, expanding choice and convenience for their customers and helping boost sales for local businesses in time for the holiday season.”
The official launch of PayLater marks an emerging trend of BNPL offerings arising from both lenders and payment organisations in the country.
In October, Visa confirmed its BNPL product would be available for ANZ customers from early next year.
Around this same time, Mastercard also confirmed it would be introducing its BNPL product for eligible lenders and fintechs.
In August, Commonwealth Bank of Australia (CBA) began rolling out its own BNPL product, making it available to 4 million of its customers.
However, an abundance of data is raising red flags over the long-term impact of BNPL and consumer debt.
Last week, CBA provided an analysis of its 2020/21 financial year data to the House of Representatives standing committee on economics, noting that 7.2 per cent of BNPL customers had overdrawn their transaction account, while 4.8 had fallen behind on repayments.
For non-BNPL customers, these figures were 3.9 per cent and 2.8 per cent respectively.
In June, NAB published its Consumer Insight Report: Buy Now Pay Later, which found that 18 per cent of Australians were in BNPL debt during the March quarter, marking it the fourth most common type of debt during this period.
Last November, ASIC published findings that found 22 per cent of customers prioritised paying off their BNPL debt over loan repayments or bills.
The regulator also discovered that 21 per cent of BNPL users had missed a payment in the prior 12 months, while 5 per cent had missed mortgage repayments in order to pay off their BNPL debt.
[Related: CBA finds BNPL customers worse with debt]