Afterpay tops $100 a share on Westpac tie-up

The record share price means the combined wealth of co-founders Anthony Eisen and Nick Molnar is now more than $4bn.

The record share price means the combined wealth of co-founders Anthony Eisen (pictured) and Nick Molnar is now more than $4bn. Picture: Natalie Grono

Shares in “buy now, pay later” operator Afterpay crossed $100 for the first time on Tuesday, after the market darling announced an exclusive partnership with Westpac to offer savings accounts for budget-focused customers.

In a statement to the ASX, Afterpay said the collaboration would enable the introduction of Afterpay savings account and cashflow tools for customers from July next year.

The fintech, which has seen 700 per cent growth in its stock price since March and now has more than 10 million users globally, said the new products would complement Afterpay’s existing business model by “offering additional, customer-centric alternatives to traditional banking products”.

The new savings accounts, to be available through a mobile app, will initially be able to perform basic banking activities such as the payment of bills, budgeting and cash withdrawals, with features to be introduced over time.

Afterpay said data gleaned from customers making use of these features would “deliver further insight into how customers prefer to manage their finances, what their savings goals are, and how responsible spending behaviour can be further encouraged and rewarded”.

Afterpay’s stock passed the $100 mark in morning trade before closing at $101.94, up 4.5 per cent for the day. The company, which started as a side business for co-founder Nick Molnar, who was running his family’s online jewellery store, is now worth $29bn.

The record share price means the combined wealth of co-founders Anthony Eisen and Mr Molnar is now more than $4bn. The stock debuted at $1 in 2016.

The company has already launched its instalment payment products across the US, UK, ­Europe and New Zealand, and is now looking to take on Asia.

Mr Eisen, Afterpay’s CEO and managing director who is appearing at The Australian’s e-commerce summit on Thursday, said the partnership represented considerable foresight on the part of Westpac.

“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,” he said.

“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,” Mr Eisen added.

“This will allow us to assist them to budget more effectively and avoid debt traps.”

A source said Afterpay was responding to demand from customers for budgeting and cashflow tools, and that it preferred to partner with the banks rather than going through the significant regulatory processes itself.

The deal also means that Afterpay will be the exclusive BNPL partner for Westpac’s digital bank, at least for the next few years.

Westpac CEO Peter King said the deal would help the legacy institution meet the changing needs of its customers.

“We are very pleased to be able to offer our digital bank-as-a-service platform to one of Australia’s most prolific fintech innovations, Afterpay,” he said.

Westpac also owns a 10.67 per cent stake in Afterpay competitor Zip Co.

“This collaboration reflects our strategy to meet the changing needs of customers and demonstrates our desire to partner with differentiated business models that provide alternative ways for consumers to spend and manage their finances,” Mr King said.

Afterpay also said it would seek to roll out Westpac’s digital platform capabilities across all its markets.

“By leveraging the globally scalable technology and associated banking and regulatory infrastructure, Afterpay can design, build and deliver additional services to customers without diverting from its unique and customer-centric business model, as well as retain ownership of its customer interaction and relationships,” it said.