Afterpay teams up with Westpac to offer savings account for Australians

A major buy now, pay later company has teamed up with a big four Australian bank to offer a new banking product that will be available next year.

Afterpay has teamed up with Westpac to launch the buy now, pay later provider’s first savings account in Australia, which it says will be a banking product for budget focused consumers.

In a statement to the Australian Stock Exchange on Tuesday, the fintech juggernaut announced it had entered into an agreement with Westpac to use the major bank’s new “digital bank-as-a-service platform” to set up a savings account and cash management product.

Afterpay said the new product facilitated through Westpac would allow its customer base to have greater control over their finances and be able to manage funds through one service, with the product expected to be available from July 2021.

The account will allow existing customers to conduct the majority of their personal banking through Afterpay, such as paying bills, withdrawing cash and budgeting. It will also allow consumers to set savings goals and be rewarded for good saving behaviours.

Westpac will provide Afterpay with banking technology to allow it to open up a savings account product. Picture: William West/AFP

Afterpay chief executive Anthony Eisen said the implementation of the savings product would deepen its relationship with its growing customer base that had surpassed 10 million users globally.

“The introduction of savings accounts and budgeting tools offers new customer benefits that

continue to build on our core principle of encouraging responsible spending and enabling financial wellness,” Mr Eisen said.

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

Westpac’s decision to leverage the Australian tech darling comes despite the major bank holding direct investment in rival fintech company Zip.

Afterpay chief executive Anthony Eisen said the company was encouraging responsible spending. Picture: Natalie Grono

“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,” Westpac chief executive Peter King said.

Afterpay has launched its instalment payments product across the US, UK, Europe and New Zealand.

The rapid adoption of its services primarily by younger consumers has garnered investment from major Chinese technology company Tencent.

Afterpay vice-president Lee Hatton said the buy now, pay later platform intended to offer the same service to its customer base in other countries.

“Broadening Afterpay’s ecosystem to include new money management tools and products allows us to leverage our insights to deliver innovative solutions that meet the needs of our customers, helping them to make better-informed financial decisions and further differentiating us from traditional credit products,” Ms Hatton said.