General manager unpacks the benefits of the new offering
There has been a lot of noise in the Buy Now Pay Later (BNPL) space recently as consumers take advantage of the interest-free flexibility it affords. The Commonwealth Bank of Australia recently announced it was bringing its own version to the market, making it the first major bank to offer BNPL to its transaction account holders. CBA general manager Caleb Reeves said the bank was “in the best position to offer the most responsible BNPL offering to customers.”
“We’re doing everything we can to make our BNPL offering the most responsible option we can,” he told MPA. “When CommBank’s BNPL is made available from mid-2021, it’s available to eligible CBA customers who meet specific criteria. This includes having a CBA transaction account with evidence of a salary or income being regularly deposited to cover repayment instalments, as well as following internal and external credit assessments.
“We want to make our BNPL the most responsible offering we can, so have a number of criteria for customers to meet to be eligible and approved.”
He said the bank invested in BNPL after noticing strong demand from its customers for a more “secure” platform than currently offered in the market.
“BNPL is a competitive space and a growing industry,” he said. “We’re listening to and engaging with our customers and we know they’re looking for access to cash flow in ways that are simple, low cost and have no surprises.”
Creating its own BNPL was the “next logical step” for CBA as it continued to build on its product suite, he added.
“This is supported by recent research which shows around 76% of Australians who use BNPL are interested in a BNPL service from their main bank, citing they feel it would be more secure and reliable,” he said. “It also helps them to see their BNPL alongside their banking in one place and simplifies their financial relationships.”
He said the platform would offer advantages to both customers and businesses, the latter not liable to pay BNPL costs in addition to standard merchant costs. For customers, the reach of CBA’s platform will be broader than that of other BNPL providers in the market.
“Some BNPL services can only be used at select retailers,” said Reeves. “With our new BNPL, CBA customers will be able to use this at any retailer or business they can use CBA debit or credit cards.”