Westpac has become the last of the Aussie big four banks to offer its own rival BNPL service, announcing the launch of a new pay-in-four payments option for its credit card customers – dubbed ‘PartPay’.
The service, set to be available to customers “in coming months”, will enable Westpac credit card users to split their payments into a fortnightly repayment plan – an initial instalment payment followed by a further three fortnightly instalments.
PartPay is only available for payments totalling more than $100.
Once the option is selected, each PartPay payment, Westpac confirmed, is automatically deducted from the customer’s nominated Australian bank account over the six-week repayment period.
Rather than attracting an immediate additional charge, missed instalment payments are transferred to customers’ credit card purchase balance, attracting the standard interest rate of the credit card.
“Customers have told us that they want more flexibility with their payments, especially for items where they may not be able to cover all of the cost up front,” said Westpac managing director, consumer finance Steve Rubenstein.
He added that flexible payment services, including BNPLs, “particularly [resonate] with younger customers”.
In a clear effort to differentiate itself from the loosely regulated BNPL sector, Westpac stressed that PartPay will only be made available to customers who have gone through “extensive credit and repayment checks”, with the service restricted to those customers who have been approved for a Westpac credit card.
“What responsible lending obligations are meant to do is ensure that customers can afford the credit line that they’re taking out without going into substantial hardship,” Rubenstein said.
Additionally, because PartPay shares the same credit limit as a customer’s credit card, customers are “not taking on additional credit responsibilities”, Rubenstein said.
There will be no fee or charge for using PartPay, except for foreign transaction fees, and there will be no late payment fee if an instalment is missed.
Rubenstein added that more flexible payment options may, in the future, be added to PartPay.
“The market for instalment-based purchases continues to evolve, so we’re keeping a watching brief.
“It’s possible over time we might have longer fortnightly instalment plans delivered through PartPay or other flexibility or control features added to our credit card products.”
Westpac has pushed for greater regulation of the BNPL sector, calling on the Federal Government to mandate the holding of an Australian Credit Licence by BNPL providers – the most stringent of the three proposed regulatory pathways proposed by the Government.
Under that option, the sector would also be subject to responsible lending obligations under the Credit Act, including a requirement for BNPL providers to make reasonable inquiries into a consumer’s financial situation and take steps to verify the information.
“Our position is to consider BNPL as a form of credit, and therefore it should be subject to the same standards as other forms of credit,” Rubenstein said.
“From that starting point, there could then be a discussion around the idea of proportionality, and how the requirements should be applied to lower risk customers or lower risk credit.”
Westpac is one of the last of Australia’s big four banks to offer a flexible, staggered, and fee-free repayments option, with CBA the first to launch its own direct BNPL rival, StepPay, in mid-2021, followed more than a year later by NAB with its Now Pay Later service, unveiled late last year.
ANZ, rather than develop its own in-house BNPL solution, opted to leverage Visa’s existing Instalments feature, made available to customers through the bank’s merchant payment partner, Quest Payment Systems. The service was made available to ANZ customers last year.
In addition to PartPay, Westpac also runs a complementary fee-based, credit card payments instalment service, SmartPlan, providing longer-term monthly instalment plans for existing transactions.