Citi enters BNPL market in Australia with Spot. Buy Now, Pay Later
Launching in October, consumers can apply online, or via the Citi mobile app if they are an existing Citi customer. If approved, they will gain access to an account limit of up to $1,000 and can add the Spot card to their digital wallet. Customers can manage their account via the Citi mobile app and will link any bank account in their name to their Spot account for their fortnightly payments.
Payments will automatically be split into four fortnightly payments, but for purchases of $200 or more, customers will have the option to pay a $10 flat fee to break the payments down further, into eight smaller fortnightly payments.
Spot. Buy Now Pay Later was built with Citi’s expertise as the world’s largest credit card company and Australia’s largest white-label credit card provider, but it will be an entirely separate brand and issued by Citi’s affiliated company, Diners. It will leverage Mastercard’s leading payment network.
Commenting on the launch, Head of Cards and Loans at Citi Australia Choong Yu Lum said, “We are excited to enter the buy now pay later market with an offering that will be compelling for customers and merchants. This is a global first for Citi, and we’re confident that success in the Australian market could lead to a worldwide rollout of the new payment method.”
Accepting Spot is frictionless for merchants, who can offer the Spot. Buy Now Pay Later product to their customers, with no extra fees for use or technical integration required.
“As consumers and retailers continue to shift their payment preferences and behaviours, providing choice in how to pay and get paid has never been more important. With Spot. Buy Now Pay Later, Citi is taking full advantage of Mastercard’s market-leading payment network and instalment technology to offer its customers more flexibility, while still benefitting from the same widespread acceptance, safety and security they’re used to when paying with their Mastercard card,” said Surin Fernando, Vice President of Business Development, Digital and Innovation for Mastercard in Australia.The changing face of credit
Research conducted by Citi1 in late 2020 indicates that while the majority (98%) of Australian credit card holders are aware of major buy now pay later services, only 25% have actually used them.
“How Australians use credit is evolving, and there remains an opportunity for new players to step in and listen to consumers who are sending a clear message they want innovative payment solutions to help them manage their finances,” Mr Lum said.
Furthermore, RFI research indicates that the typical buy now pay later user is changing, with consumers aged 25-44 seeing the greatest increase in adoption over the last two years2. The research also shows that while overall use of buy now pay later is plateauing, use of more than one buy now pay later provider is increasing.
“While some may have the perception that buy now pay later tools are the domain of young Australians purchasing fast fashion – this view is outdated, and this payment method has much greater appeal across demographics and purchasing categories,” Mr Lum added.”