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3.3 million Australian Afterpay customers will now be able to have access to savings accounts and budgeting tools after it struck a deal with big four bank Westpac.
The partnership marks a shift in Australia’s online banking landscape as legacy juggernauts and new technology-focused players navigate relationships with one another, as younger Aussie consumers become more savvy with their finances.
Yahoo Finance breaks down exactly what you need to know about the new deal, and what it means for you.
What this means for customers
The new partnership effectively means Afterpay’s customers will be able to conduct their typical banking activities – such as opening an account, depositing money and making transactions – through Afterpay’s platform, rather than go through a typical bank.
If you’re with Afterpay, it means you can set up a new savings account and pay your bills, withdraw cash, and budget.
And on Westpac’s end, it means that their transaction and savings accounts will be provided to Afterpay customers.
Afterpay wants to help you stay out of debt
The new service, paired with an existing Afterpay account, will also give the fintech giant greater insight into Aussies’ spending habits.
“In deepening our relationship with our customers we will gather greater insights into how they prefer to manage their finances and better understand their savings goals,” said Afterpay CEO and managing director Anthony Eisen.
“This will allow us to assist them to budget more effectively and avoid debt traps.”
Eisen said he was excited to give customers a different way to manage their finances.
A bit more background
The new partnership makes use of Westpac’s cloud-based 10x Future Technologies platform.
It’s part of Westpac’s new drive to deliver “digital banking-as-a-service”.
Macgregor Duncan, Westpac general manager of corporate and business development, said Australians were likely to see banking experiences embedded in other experiences or “workflows”.
“I don't think anyone is saying that traditional banking is going to go away or even lessen in importance. I just think this represents a new growth opportunity for us and our partners,” he said.
Something else you should know
Buy now pay later rival Zip Co recently teamed up with Visa, Apple Pay and Google Pay in a move that allows Zip to be used anywhere where the latter three are accepted.
Basically, it means you can use Zip when you ‘tap and pay’ rather than using your actual Visa credit or debit card.
Zip customers set up a ‘virtual card’ that can then be linked to Apple and Google Pay, which then let you use Zip for mobile payments.
“As a customer-obsessed organisation, we are excited to announce Tap & Zip, which completely changes the game, enabling Zip to compete with the credit card at every checkout in Australia,” said Zip CEO Larry Diamond on Tuesday.
“Everywhere Australians can pay with a Visa contactless card, they’ll now also be able to Tap & Zip, interest-free.”
Overall, the new products allow for Aussies to have more options when they pay, and the competition in the banking and payments sector should mean a better deal for customers.
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