Australia’s Westpac Group is partnering with buy now, pay later (BNPL) firm Afterpay to introduce its new banking-as-a-service (BaaS) platform to Afterpay customers, Westpac said in a statement on Tuesday (Oct. 20).
The collaboration will enable Afterpay to offer its 3.3 million users checking and savings accounts on Westpac’s new BaaS platform. The platform leverages 10x Future Technologies to give Westpac’s partners the ability to offer banking products and services.
The bank built the BaaS platform in response to the rise of new cloud-based flexible banking systems and a pivot in the distribution of financial products, according to Macgregor Duncan, general manager, corporate and business development, Westpac.
“In particular, we’re seeing some of these large digital platforms [that] have an opportunity to embed financial services within their ecosystem,” he noted.
Afterpay will control how people see and experience the new service, while Westpac will handle the direct banking relationship with end customers.
“Over time, we’re likely to see a lot of those banking experiences embedded within other experiences or workflows, and customers choosing to do their banking through that avenue. 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,” Duncan said.
As a disruptor of traditional credit, Afterpay was founded in 2014 to offer its customers interest-free installment plans for online purchases. Westpac Banking, which was established more than 200 years ago, announced last year that it would invest in a new digital platform to bring products and services to market via FinTech and institutional partners.
“Together with the power of our retail platform, the latest banking technology from 10X, and the support of Westpac, we will begin by offering cash flow management in a simple way,” said Anthony Eisen, chief executive officer, Afterpay. “Afterpay is in a unique position to extend and deepen the relationship with our customers and help them to manage their money more seamlessly through savings and budgeting tools. For Afterpay, this is clearly just the beginning as we explore this opportunity globally.”
Afterpay initially launched in Australia and New Zealand, and is now offered at major retailers across the U.S.
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