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CBA’s new buy now, pay later product is anywhere debit and credit cards are accepted.
CBA’s new buy now, pay later product is anywhere debit and credit cards are accepted.
Commonwealth Bank of Australia has today unveiled a new buy now, pay later (BNPL) offering which can be used anywhere debit and credit card payments are accepted.
Available to eligible CBA customers from mid-2021, the new service will directly link to CBA bank accounts with no ongoing fees and at no additional cost (above standard merchant fees) to businesses.
“Customer needs are evolving and this new BNPL offering is about giving customers more choice around how they choose to pay and when, depending on the option which suits them best,” said Angus Sullivan CBA’s group executive, retail banking services.
“As the leading digital bank in Australia, we believe we are best placed to offer our customers a prudent and responsible BNPL option based on the trends and insights sourced from real time transaction data over many years,” Mr Sullivan added.
The launch of CBA’s new BNPL product follows recent research by the RFi Group which showed 76 per cent of Australians who currently use a BNPL product would use a similar bank-offered service.
Late payment fees will be charged at $10 per instalment with caps in place to minimise the total amount of additional fees charged.
“We are excited to announce the first BNPL offered by a major bank which will give customers access to cash flow in a way that meets their changing preferences and expectations,” Mr Sullivan said.
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Mortgage holders should brace themselves for more pain as the Reserve Bank of Australia board prepares to meet tomorrow for the first time this year.
Most economists and the major banks are predicting a rise of 25 basis points will be announced, although the Commonwealth Bank suggests that the RBA may take the unusual step of a 40 basis point rise to bring the interest rate up to a more conventional 3.5 percent. This would allow the RBA to step back from further rate rises for the next few months as it assesses the impact of tightening monetary policy on the economy.
The decision by the RBA board to make consecutive rate rises since April last year is an attempt to wrestle inflation down to a more manageable 3 or 4 percent. The Australian Bureau of Statistics reports that the inflation rate rose to 7.8 percent over the December quarter, the highest it has been since 1990, reflected in higher prices for food, fuel and construction.
Higher interest rates have coincided with falling home values, which Ray White chief economist Nerida Conisbee says are down 6.1 percent in capital cities since peaking in March 2022. The pain has been greatest in Sydney, where prices have dropped 10.8 percent since February last year. Melbourne and Canberra recorded similar, albeit smaller falls, while capitals like Adelaide, which saw property prices fall 1.8 percent, are less affected.
Although prices may continue to decline, Ms Conisbee (below) said there are signs the pace is slowing and that inflation has peaked.
“December inflation came in at 7.8 per cent with construction, travel and electricity costs being the biggest drivers. It is likely that we are now at peak,” Ms Conisbee said.
“Many of the drivers of high prices are starting to be resolved. Shipping costs are now down almost 90 per cent from their October 2021 peak (as measured by the Baltic Dry Index), while crude oil prices have almost halved from March 2022. China is back open and international migration has started up again.
“Even construction costs look like they are close to plateau. Importantly, US inflation has pulled back from its peak of 9.1 per cent in June to 6.5 per cent in December, with many of the drivers of inflation in this country similar to Australia.”
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