Suncorp enters a crowded market with PayLater
Suncorp has entered the “buy now pay later” race against the likes of Afterpay, but with a few more checks and balances.
Discretionary spending is drying up, according to the ABS
Suncorp appears to be a late entrant into the BNPL market which already has about 20 major providers, notably Afterpay, but the decision is clearly one that consumers want, particularly those under 50.
And Suncorp’s strategy effectively makes BNPL a feature, rather than a standalone product.
A Canstar report recently released on the industry showed that younger generations had a more favourable opinion of BNPL services. It showed 62 per cent of Gen Z respondents thought BNPL was more financially responsible than using a credit card, while only 27 per cent of Baby Boomers thought so.
About 5 per cent of Australians hold a BNPL debt and many of those had more than one card.
The NAB recently released a report showing that about 20 per cent of Queenslanders had a BNPL card, the highest level in the nation and the most likely purchase on a BNPL card was clothing, followed by household items.
About 83,000 merchants in Australia use the top two BNPL providers Afterpay and Zip.
Like other BNPL cards the Suncorp PayLater card would be interest free but comes with a $10 late fee. Consumers would need to pass a credit check on application and unlike some of BNPL players they would be limited to only one card.
Consumers would also have a two-day grace period for missed repayment, after which the $10 late fee applies.
In a first for the Australian market, Suncorp’s PayLater will include both a physical and digital Visa debit card.
The company said that would allow customers the choice to pay through a debit card or through the PayLater card.
Suncorp Bank chief executive Clive van Horen said PayLater also eliminated additional costs to merchants “who are currently paying millions of dollars in traditional BNPL fees’’.
“Some customers prefer to use credit cards, while others want simple, short-term payment options from a trusted and secure bank,” van Horen said.
“PayLater is available via the Suncorp app which can help you budget easily since everything’s in one place and there’s no need to download separate apps.”
The card would also have a $1000 limit and the card would not allow cash advances or gambling transactions.
According to comparison website Canstar there are 16 BNPL cards in Australia, including one offered through the Commonwealth Bank.
Suncorp Bank said its Visa-backed PayLater card would be available from November.
