Citi, the fifth largest provider of credit cards in Australia, is planning to launch the new buy now, pay later business in the third quarter of the year which will compete head on with Afterpay and Zip in the fast-growing payments sector.
Citi said on Friday that the offer will be launched under a new brand, separate to Citi. The name cannot be revealed just yet, but an announcement is expected in the coming weeks.
Alan Machet, chief executive of Citi Australia’s consumer banking said this new product shows Citi’s consumer bank is keeping up with the evolving face of credit. “We are confident this offer will be compelling in the local market for both consumers and merchants.”
Through the new BNPL product, consumers can pay in four instalments over six weeks or opt to pay a small fee for access to longer term payment plans for slightly larger ticket items.
The bank said BNPL service can be used wherever MasterCard is accepted – locally or abroad, online or in-store, and customers can link any deposit account. The Mastercard partnership model means this is frictionless for merchants, and they can sign up fee-free.
The product will be available for existing Citi customers and non-customers. Citi customers will be able to apply via their mobile app for approval up to $1000, and then get a virtual card for their mobile wallet. It’s a 100 percent digital product. The 100 percent digital offering will not charge customers any interest.
Earlier this month joined up with global payments giant PayPal to issue a white-label credit card. The zero-fee card will be available from mid-July with an annual interest rate of 20.99 percent, can be used anywhere Visa is accepted globally and earns points with every eligible purchase.