Afterpay hits $100 as Westpac partners with BNPL giant
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The BNPL giants unveiled deals that at face value are different but both make their platforms more integrated with everyday finances.
Zip estimates that only 13 per cent of stores in Australia accept buy now pay later options. While this may be less of a problem online, it can be in brick and mortar stores which see 87 per cent of broader retail payments.
But Zip’s announcement this morning changes all that, launching a new “Tap and Zip” feature which will enable Zip users to shop as seamlessly as using a credit card so long as the relevant outlet accepts Visa cards.
Zip co-founder Larry Diamond said not being able to use Zip in digital wallets was a pain point for customers. In that context, he declared today’s announcement completely changed the competitive landscape.
“This is a huge day for Zip and the Australian retail sector,” Diamond said.
“Tap and Zip is a new way for customers to pay that will dramatically increase in-store transactions and conversion rates for thousands of retailers and merchants around the country, many of whom have been significantly impacted over the past year.”
Zip shares rose 3 per cent today. But they are up 77 per cent in the last year and over 1,000 per cent in the last three years.
Westpac has been planning a new digital banking platform for several months now and Afterpay is its first customer.
CEO Peter King said the deal was part of the bank’s long-term strategy to support banking changes fuelled by fintech innovation.
“The platform allows us to combine our banking experience with the innovation of our partners to support new customer experiences,” he said.
Broking platform Bell Direct told its clients the deal was important because it represented “a new flag in the sand” and clearly distinguished it from other BNPL providers in focusing on cashflow management.
“It is moving with a distinct jolt that it is going after more of the banking value chain, starting with deposits,” they said.
Afterpay’s CEO Anthony Eisen said the partnership offers cashflow management in a simple way.
“We believe Australians deserve greater support and insight to help manage their money,” he said. “Afterpay is in a unique position to extend and deepen the relationship with our customers and help them to manage their money more seamlessly through savings and budgeting tools.”
Eisen also hinted more deals were to come, noting: “For Afterpay, this is clearly just the beginning as we explore this opportunity globally.”
Like Zip shares, Afterpay shares only rose modestly this morning but surpassed $100 for the first time this morning.
For the record, Afterpay listed at $1 at its May 2016 IPO.
It reached a high of $39.44 in February before the COVID-19 crash, when it dropped as low as $8.90 on March 23. Since then it is up over 1000 per cent.