The Bank of… Afterpay? BNPL leader adds cash management platform Money by Afterpay
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Afterpay (ASX:APT) is expanding from its core BNPL offering, with a new cash management platform – Money by Afterpay – scheduled for October launch.
The platform is Afterpay’s first product launch in connection with its Westpac partnership, following on from their integration deal announced last October.
A central feature of the Money by Afterpay app is that it will allow customers to earn a flat interest rate of 1% on savings accounts.
Westpac’s status as an authorised deposit-taking institution (ADI) means customer funds will be protected by government guarantee.
Afterpay said it has also obtained an Australian Financial Services Licence (AFSL) that allows it to distribute basic debit cards and financial advice products.
The company said employees will start testing the app in July, and generate feedback for the final product before the app’s October release.
Amid a broader selloff on the ASX, shares in Afterpay edged higher by around 1% to ~$106, off from its July highs of ~$123.
BNPL competitor Zip Co (ASX:Z1P) rose by more than 3% on no news, while other companies in the listed BNPL cohort traded flat or slightly negative.
The goal of the Money by Afterpay app is to leverage Afterpay’s strong branding with millennial and Gen Z customers, said Lee Hatton, the group’s vice president for new platforms.
“Combining money management with the BNPL offering will allow us to help customers spend, save and play just by using Money as their primary app,” Hatton said.
Afterpay’s move marks the first clear example of a company in the BNPL space using the strength of its customer base to pivot into alternative financial products.
The Money by Afterpay app will operate as a zero-fee platform, and customers will also be able to check and monitor their various BNPL balances.
The company said it’s aiming to foster a simplified approach to money management, with a focus on savings.
The 1% interest-rate on savings deposits will apply for up to 15 separate accounts holding as much as $1m each.