Australian buy now, pay later (BNPL) outfit Afterpay has launched an in-house pilot of its ‘Money by Afterpay’ app – the BNPL giant’s first foray into consumer banking.
The staff-only pilot of the new Afterpay app, simply known as ‘Money’, has been launched just ten months after the BNPL signed on as Westpac’s first client of its Banking-as-a-Service (BaaS) platform.
The BaaS, which enables white-labelled banking services through APIs, is powered by core technology developed by UK-based start-up 10X Future Technologies.
10x chief Antony Jenkins has spruiked the BaaS as a “low-cost, cloud-native” platform, that leverages “leading-edge advancements in data security, artificial intelligence, predictive analytics and chatbot technologies delivered through an intuitive user experience”.
Afterpay has been in formal partnership with Westpac since October 2020, piggybacking off the big four’s banking license to enable its new cashflow tools and transaction accounts, which have now been made available through the new Money app.
Slated for public launch in October this year, Money will be made available to customers of the BNPL only, with Afterpay login credentials required to access the new app.
The app is targeted at Millennials and Gen Z consumers – those, the company said, that do not necessarily “trust their own money behaviours” but feel that existing in-app savings offerings are “unnecessarily complex and inaccessible”.
Coming off the back of “in-depth research” with customers, Afterpay noted that, fundamentally, customers wanted greater “control over savings”, which they considered “key to envisaging a greater financial future for themselves”.
Afterpay maintains that its new Money platform will give customers greater control and visibility over their savings.
Offering a “single, seamless view of their finances”, Money’s home carousel will display BNPL balances and upcoming instalments, alongside daily spending and savings accounts.
Allowing customers to hold up to 15 different savings accounts, Money encourages users to open separate accounts to track and accomplish different savings goals more easily, Afterpay said; meanwhile, the company will offer an interest rate of one per cent per annum for up to $1 million stored in each account – competitive with current high interest saving account rates.
Afterpay also intends to offer a fee-free daily account through the app, encouraging users to make this their primary bank account. Customers will also be given physical debit cards, digital wallet offerings, and real-time payments functionality.
“We’ve built upon the trust and love of the Afterpay brand to bring Gen Z and Millennials a money and lifestyle app that’s truly built for them,” Afterpay executive vice president, new platforms, Lee Hatton said.
While Westpac is the regulated deposit account and card issuer for Money, Afterpay holds an Australian Financial Service License (AFSL) from ASIC, enabling it to provide general financial product advice and distribute basic deposit products and debit cards.
“Money will broaden our relationship with our loyal customers and also attract a new group that’s looking to streamline how they manage their finances within the debit economy, further cementing our commitment to supporting responsible spending,” Afterpay co-chief executives Anthony Eisen and Nick Molnar said in a statement.
Afterpay is currently used by 86,000 retailers worldwide and has over 14 million customers globally. It has a presence in Australia, New Zealand, Canada in the USA, well as UK, France, Italy and Spain (where it is known as ClearPay).
The fintech’s app launch comes as the Reserve Bank of Australia, in its March 2021 bulletin, noted that under 40s represent more than 55 per cent of the country’s BNPL users.
Afterpay’s main rival, Klarna, has a European banking license and operates savings accounts in Sweden and Germany.