The Westpac Banking Corp (ASX: WBC) share price could be one to watch over the coming months. The bank released a media statement this week advising it is set to enter the buy-now, pay-later (BNPL) market.
At yesterday’s closing bell, Westpac shares ended the day up 0.58% to $25.83.
Westpac eyes BNPL industry
According to the release, Westpac will launch a new zero-interest credit card later this year. The bank says the digital card, called Flex, will provide customers with more flexibility and control in managing their money.
Flex allows customers to access up to $1,000 with no interest on purchases, no late payment fees, and no foreign currency fees. However, a flat $10 monthly fee will apply to customers who are unable to clear the balance from the previous month on time.
When available, customers can apply for the card either online or through their mobile banking app. Once approved, a digital card will be issued within minutes via their mobile wallet or banking app.
Card spend, repayments and reminders can be accessed from the online platform on which customers can choose their repayment cycle. This can be fortnightly or monthly.
To protect customers from fraud and scams, the card verification code (CVC) will automatically change every 24 hours.
Flex can be used anywhere MasterCard is accepted, either in-store or online.
Westpac stated that consumer research shows younger Australians are reluctant to use a traditional credit card, compared to older generations. The data also highlights that Generation Z and Millennials are mostly using all their banking tasks online to manage their cash flow and repayments.
Investors will be waiting with interest to see if the new card has any effect on Westpac shares.
Westpac chief executive consumer and business banking Chris de Bruin said:
We’re giving customers a new way to pay which is simple, flexible and fast, as well as a completely digital experience from start to finish.
Flex has been designed to meet the changing needs of younger customers who want greater control over their finances and are more likely to use their smart phone to manage their money. It’s easy to use and understand, and customers will be able to use Flex to make purchases in-store or online just like a regular card.
Westpac share price summary
Since the start of 2021, Westpac shares have rebounded to reach pre-COVID-19 levels. However, since mid-May, the upwards trajectory of its share price has slowed and began to stabilise. Nonetheless, the company’s shares are up more than 30% in 2021, reflecting confidence that the worst has passed.
Westpac commands a market capitalisation of around $94.76 billion, making it the third-largest bank on the ASX.