NAB is getting into BNPL

In another blow for the already crowded buy-now-pay-later (BNPL) sector, another major bank is getting into the space, with NAB announcing its own pay-in-four instalments offering.

The bank’s opened pre-registration for customers today for the NAB Now Pay Later product

They will be able to access up to $1,000, split purchases into four payments, use it anywhere Visa is accepted and add NAB Now Pay Later to their digital wallets for online and in person payments.

It is expected to launch in July this year.

NAB says there will be no account or late fees and no interest on the outstanding balance.

NAB Group Executive Personal Banking Rachel Slade said NAB Now Pay Later would approve customers based on eligibility and credit assessments.

“Customers will be able to activate NAB Now Pay Later via their mobile where a credit check will be completed. This will ensure customers can have the confidence to appropriately manage their repayments, both today and in the future,” she said.

“With NAB Now Pay Later integrated into the NAB app, it will be visible alongside other NAB products like transaction accounts.”

The Big Four bank’s move into BNPL follows in the footsteps of market leader CBA, which launched its BNPL offering in August last year.

After a stellar run, the gloss for BNPL fintechs faded in 2021 amid slowing growth and regulatory concerns.

Last October the Reserve Bank of Australia announced that it had changed its view on prohibiting merchants from passing on the costs of the BNPL service, saying it was time to end it. BNPL services take up to 6% of the sale price from merchants putting additional pressure on margins in the retail sector.

Meanwhile, financial counsellors were sounding the alarm on BNPL use, saying they were becoming a massive problem for some users. ASX listed BNPLs have reported increased bad debts and revenue from late payments in more recent financial results.

Publicly listed BNPLs saw their share prices fall by an average of 36% in 2021 and amid a falling market, rising interest rates and tech stocks also being hammered this year, those falls have continued.

Afterpay, now on the ASX as CHESS Depositary Interests (CDIs) in Block, following its merger with Square (ASX:SQ2), peaked at $194.36 on March 30, now sits under $110 in late May, below its $126 merger price.

Zip has been hardest hit from a record high of $12.35 in February 2021, after acquiring US BNPL Quadpay, falling more than 90% to just $0.84 cents at market close on May 25.

Swedish fintech Klarna, which operates in Australia and CBA has a minority stake in, is reportedly cutting around 10% of its global workforce – around 500 people.

The arrival of NAB as a competitor will only add to the woes of the standalone fintechs.