What happens when you combine two of fintech’s hottest trends– buy now, pay later (BNPL) and banking-as-a-service? Afterpay is about to find out.
That’s because the Australia-based company has inked an agreement with Westpac to become the bank’s first client for its digital banking-as-a-service offering. The deal will allow Afterpay to offer WestPac checking accounts, savings accounts, and cash flow management tools to its 3.3 million Australian customers.
Afterpay will make the new banking products available in the second quarter of next year.
“The platform allows us to combine our banking experience with the innovation of our partners to support new customer experiences,” said Westpac CEO Peter King. “We look forward to working with Afterpay to deliver new products and services.”
By selling a banking-as-a-service offering, Westpac is finding a way to work alongside third party fintechs. Instead of competing with them, the bank will not only profit from them by selling its banking-as-a-service tools, but also acquire additional client accounts in the process.
Founded in 2014, Afterpay helps merchants to allow shoppers to pay for their purchases in four interest-free installments over a short period of time. The service is offered by more than 50,000 retailers across the globe and is used by more than 9 million shoppers. The company is listed on the Australian Stock Exchange under the ticker ASX and has a market capitalization of almost $29 billion. Anthony Eisen is CEO.
Today’s news comes a week after the Australian Transaction Reports and Analysis Centre (Austrac) cleared Afterpay from anti-money laundering accusations.