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While the government pushes more increased regulation over the buy now, pay later (BNPL) sector, Westpac has joined Commonwealth Bank (CBA) and the National Australia Bank (NAB) unveiling a new “PartPay” feature that allows credit card users to pay in four instalments.
Westpac credit card customers will soon be able to link their existing credit card to a new PartPay digital card, enabling them to split their purchases into an initial instalment, with a further three fortnightly instalments to follow.
As a credit card feature, PartPay will only be available to customers who have been previously approved for a credit card and PartPay will use the customer’s existing approved card limit.
It comes as the government is set to decide how strictly to regulate the sector and make amendments to the National Consumer Credit Protection Act 2009 (the Credit Act), which currently provides exemptions to the sector from holding a credit licence.
According to the Reserve Bank of Australia’s (RBA) Payments System Board, there were approximately 7 million active BNPL accounts in the financial year 2021–22 and $16 billion in transactions, an increase of approximately 37 per cent on the previous financial year.
Noting that the payment landscape had changed, Westpac’s consumer and business banking chief executive Chris de Bruin said the new feature is about giving customers more control.
“We want to give our customers greater flexibility by providing different payment options to suit their changing circumstances.
“We know our customers want more choices when it comes to their finances and this new feature will put them in the driver’s seat.
“This new feature provides that flexibility in a fast and convenient way, via a digital card that can be downloaded in the Westpac app.
Customers with Westpac’s Low Rate, Lite, Low fee, Altitude Rewards Platinum and Altitude Rewards Black credit cards can opt into PartPay to make purchases with a digital PartPay card using their existing credit card limit.
More about PartPay digital card
Customers will receive a reminder three days before the auto-payment due date, and purchases must be $100 or more.
No late payment fees will be charged for missing an instalment, and no interest or fees are charged to use PartPay, except for Foreign Transaction Fees. However, if a customer misses a PartPay payment, the instalment is transferred to their Westpac credit card purchase balance and standard interest rates will then apply.
[Related: Openpay collapses as creditors chase debt]