CBA executive general manager Marcos Meneguzzi said a key reason for CBA’s move into BNPL was a desire to retain the bank’s strong position among younger customers,who are most likely to use buy now,pay later services. “Credit cards,debit cards,buy now,pay later,they’re all different methods that customers can choose on how to pay,” Mr Meneguzzi said.
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Some analysts have predicted CBA’s entry into the already crowded BNPL market will squeeze what BNPL firms can charge retailers for the service. CBA’s merchant fees will be the same as what it charges for accepting credit cards,about 1 per cent,compared with about 4 per cent charged by Afterpay.
Jefferies analyst Brian Johnson said in a recent report CBA’s product,known as StepPay,would have the backing of the bank’s infrastructure,including its strong position among younger customers,its app,and its large fleet of payment terminals. Mr Johnson predicted BNPL services would become “globally ubiquitous,” saying banks overseas could create similar products.
“Just as Aussie Home Loans triggered a dramatic drop in mortgage margins in the 90s,StepPay could herald BNPL margin contraction,” Mr Johnson said.
Yet BNPL firms have dismissed the competitive threat from CBA and other banking giants,and some observers agree. Evans and Partners analyst Matt Wilson said he was not convinced CBA’s foray into the buy now,pay later sector would pay off,saying its lower merchant fees were not as important as its ability to generate sales leads to retailers.
“From a consumer’s point of view,you’ve got to create a platform that resonates with the generation that uses it. Afterpay is already there – I think CBA has missed their opportunity,” Mr Wilson said. “I think it’s a ‘me too’ strategy that will fail.”
Mr Blockey did not expect CBA’s entrance would have a major impact on Zip or Afterpay,saying PayPal’s move into BNPL was a bigger threat to these players.
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