Suncorp is the latest traditional bank to enter the burgeoning buy now, pay later (BNPL) niche.
As with similar and popular BNPL apps like Afterpay, Zip and Klarna, PayLater promises to allow customers additional freedom and flexibility when it comes to when and how they borrow and spend money.
“Some customers prefer to use credit cards, while others want simple, short-term payment options from a trusted and secure bank,” Suncorp Bank chief executive Clive van Horen said.
Launched in partnership with Visa, Suncorp’s PayLater card will be accepted anywhere that Visa is already. In that sense, it’s something of a counterpart to the Commonwealth Bank of Australia’s StepPay, which does much the same thing with the Mastercard network.
“The buy now, pay later sector is rapidly evolving as consumers increasingly look for flexibility and choice in the way they pay, both in-store and when shopping online,” said Visa Group country manager for Australia, New Zealand, and South Pacific Julian Potter.
In addition to removing the hurdle of asking merchants to do the work of supporting yet another BNPL app, this emphasis on infrastructure also means that merchants themselves benefit through reduced fees.
Mr van Horen framed PayLater as a win for businesses struggling under the market conditions of the COVID-19 pandemic.
“Our PayLater offering eliminates additional costs to those businesses who are currently paying millions of dollars in traditional BNPL fees,” he claimed.
Rather than rely on its own app, PayLater is integrated into Suncorp’s existing mobile banking app.
Like Afterpay, purchases made using StepPay are interest-free. Instead of paying upfront, customers are able to break purchases of over $50 but under $1,000 into four monthly instalments.
Late fees are capped at $10 per purchase, with a two-day grace period.
Where PayLater deviates from the template set out by other BNPL operators is that it does conduct credit checks beforehand and that Suncorp will issue eligible customers with a physical card, allowing them to make BNPL purchases without their phone.
Suncorp is looking to launch PayLater in November, but is asking customers to register their interest from today.