Australia’s BNPL sector,led by Afterpay,has arguably led the world in recent years,sparking a battle between banks and fintechs foryounger customers who are increasingly shunning credit cards.
PayPalentered the sector last month andCommonwealth Bank will launch its BNPL foray this month. Citi is joining the stampede in October through a product called Spot. Buy Now,Pay Later.
Citi’s head of cards and loans Choong Yu Lum acknowledged the bank was entering a crowded field,but he said it saw a gap in the market,and added that BNPL still only made up a small share of payments.
Mr Lum said Afterpay’s deal with Square,announced on Monday,was an impressive achievement that showed how important the Australian company had become in the payments landscape. “Moreover,it’s a testament to the fact buy now,pay later is not a ‘fad’ but rather one of the most significant developments in payments in recent history,” Mr Lum said.
“As the sector grows on a global scale,more players will enter the field,driving competition and innovation to ultimately give consumers new and improved options when it comes to managing their money.”
Square founder and Twitter CEO Jack Dorsey also highlighted the major shift in consumer behaviour in a late Monday briefing on the company’s takeover of Afterpay.
Mr Dorsey acknowledged the BNPL sector was increasingly crowded,but stressed differences between rival companies’ products. Mr Dorsey said Afterpay’s interest-free product aligned with Square’s purpose of “economic empowerment,” while it would also help merchants using Square’s “Seller” product to boost sales.