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‘Watch this space’: Afterpay set to launch new service

·3-min read
Lee Hatton discusses Afterpay's next feature. Images: Supplied, Getty
Lee Hatton discusses Afterpay's next feature. Images: Supplied, Getty

It’s the app that revolutionised shopping, and now Afterpay wants to help Australians manage their transactions and savings.

Users will be able to manage their cash flow, monitor their savings and transactions on the Afterpay platform with the launch of its banking-as-a-service product.

It’s something the $30 billion company is “very excited about”, executive vice president Lee Hatton said, speaking to Yahoo Finance before her appearance at Pause Fest in March.

Banking-as-a-service is a model allowing digital banks’ systems and third parties to connect through regulated channels, opening the door to more personalised financial products. Essentially, it allows third parties to incorporate digital banking into their own products.

“While we are not becoming a bank, we want to create banking experiences that reflect the philosophy and customer-centricity that have made our core product so successful,” she said.

Afterpay was born in the wake of the GFC and a consumer who was cautious of debt and hungry for flexibility in how they spent their money.

“Younger Aussies are also assessing the role of money in their lives and embracing flexibility as a rational response to economic uncertainty,” Hatton said.

“This includes an increasing aversion to debt and overt displays of wealth; as well as valuing flexibility, hyper-personalisation and transparency when it comes to money management.”

The buy now, pay later service will launch the product through Westpac’s bank-as-a-service platform later this year.

Afterpay’s setup with Westpac is similar to how TPG and iiNET use Telstra’s network infrastructure to boost internet access competition, Hatton said.

“We believe the bank-as-a-service opportunity can significantly enhance customer experience and choice, while maintaining customer protections - and something we are very excited about.

“Watch this space.”

Afterpay and Westpac announced the partnership in October 2020, with the plan billed as a way for the company’s 3.3 million users to avoid getting into debt and progress towards their savings goals.

Hatton, who has a background in Artificial Intelligence, believes that AI will also help facilitate the transition to personalised banking services.

Afterpay is now exploring how AI can be used with Open Banking. Open Banking allows third parties and banks to share data, to again offer better information and products.

“More data will mean hyper-customisation of financial solutions. Customers will demand that businesses understand them in detail and their goals,” she said.

“More data and diversified services will also allow for greater financial inclusion of people and groups that can often be marginalised by existing product offerings.”

Innovation and creativity under the microscope

It’s this tendency towards innovation that also excited the CEO of Pause Fest, George Hedon. The festival, which runs from 1 - 12 March is dedicated to fostering business and creativity - something Hedon believes has been under pressure in the last year.

Speaking on Afterpay’s success story, he said creativity has always been the biggest factor in innovation.

“Board management is now understanding that they need to integrate it in every aspect of the business and not just keep it a hostage in the creative department.”

Lee Hatton and Afterpay will join Atlassian, NASA, Netflix and more to speak at Pause Fest from 1 - 12 March 2021.

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