StepPay is the bank’s first cardless payments offering, which allows eligible customers to use the service anywhere Mastercard is accepted
Commonwealth Bank branch office, Sydney CBD. (Credit: Maksym Kozlenko/Wikipedia.)
Commonwealth Bank of Australia (CBA) has introduced a new ‘buy now pay later’ product, dubbed StepPay, available for up to four million of its eligible customers.
StepPay is the bank’s first cardless payments offering, which allows eligible customers to download the app and start using it immediately after the service is activated online.
The new offering is linked to the eligible customer’s bank account requiring no ongoing fees and is also offered to businesses at no additional cost.
StepPay comes with an initial limit of up to $1,000, and can be used anywhere Mastercard is accepted, for everyday spend for transactions less than $100.
CBA will issue a new card to customers’ digital wallets on the mobile, eliminating the need for a physical card, and is free of ongoing fees, foreign exchange fees.
StepPay allows for four easy, fortnightly instalments for transactions higher than $100, and includes a late fee of $10 per missed instalment repayment.
CBA executive general manager Marcos Meneguzzi said: “We’re excited to create the first BNPL from a major bank which can be used anywhere our cards are accepted.
“We know BNPL is a popular choice among customers, but is hampered by its limited use and availability in only selected retailers and businesses.
“With StepPay, customers have freedom around where they’d like to shop, offering the same accessibility as our other CBA cards.”
CBA said that more than 86,000 customers have already pre-registered for StepPay, which underlines the demand for the bank offered BNPL.
The new service is designed based on the bank’s recent research, which showed that 76% of Australians who use BNPL are willing to use a BNPL service offered by their main bank.
The Australian lender said that the StepPay customers are approved based on specific eligibility and credit assessments, by applying robust criteria.
Also, eligible customers are required to show evidence of regular deposits into their CBA transaction account to cover repayment instalments, subject to credit assessments.
Meneguzzi added: “StepPay is a win particularly for smaller businesses who may be charged a high fee in order to offer BNPL to customers. With no additional merchant costs or integration costs, StepPay levels the playing field and allows businesses to better compete.
“Creating a responsible BNPL is at the forefront of StepPay’s design. And while we expect it will have great appeal among customers, it will only be available to eligible customers so we can offer the most responsible option we can.”