Afterpay savings accounts
Afterpay announced that it’s going to launch savings accounts and cash flow tools for customers in Australia. It will be facilitated by Westpac’s new digital bank as a service platform.
Customers of Afterpay will be able to use the new savings accounts to do the majority of their money management activities, including paying bills, withdrawing cash and budgeting. More services and tools will be introduced over time for customers.
These savings accounts will be linked to a user’s existing Afterpay account to gain further insights into how customers manage their finances, what their savings goals are and how responsible spending behaviour will be encouraged and rewarded.
Afterpay thinks that these insights will deliver a more tailored user experience and help both the consumer as well as retailer connections. Perhaps that means it could help advertising.
Afterpay will use Westpac’s banking licence and digital bank as a service platform, which uses cloud technology from 10x Future Technologies.
The buy now, pay later (BNPL) business said that it plans to roll out these platform enhancements across all regions. Afterpay is pleased that it can offer new services and retain ownership of its customer interaction and relationships. Afterpay also said the collaboration would bring efficiency relating to risk management and a processing cost perspective and it has the potential to make new revenue streams over time, without needing to develop traditional banking or credit products.
Afterpay CEO and Managing Director Anthony Eisen said: “We are excited to leverage the bank-as-a-service platform to provide customers with a different way to manage their finances, without relying on traditional banking services. We applaud Westpac’s foresight in curating this innovative digital platform and welcome their desire to partner with Afterpay to meet the changing needs of a powerful next generation of customers.”
Afterpay continues to try to innovate the personal finance market, but I’m not sure if it will make a material difference at this point. Afterpay isn’t a bank, so it’s not as though it can then use the savings money to lend for mortgages.
Is Afterpay a buy? I’ve said it wasn’t a buy before, when it was lower. And it keeps rising. So it could continue to produce market-beating returns, but I don’t know if it’s worth buying today because of the uncertainty relating to long term merchant margins. It continues to generate strong underlying growth. But there are other ASX growth shares I’d rather buy first, such as Pushpay Holdings Ltd (ASX: PPH).