The fiercely competitive buy now, pay later space has a brand new entrant, with National Australia Bank making a pitch to prise shoppers away from the likes of Afterpay, Zip Co, Step Pay and Klarna.
NAB customers can from Thursday pre-register for early access to the new “NAB Now Pay Later” product, which, like similar services, allows people to take their goodies home immediately while staggering payments out over several weeks.
NAB Now Pay Later customers can split purchases of up to $1000 into four fortnightly payments at any location anywhere Visa is accepted, including supermarkets and petrol stations.
However, unlike others, the big four lender is boasting no late fees, no interest and no account fees.
Canstar money expert Effie Zahos said she imagined the take-up among NAB customers will be very high given the soaring cost of living.
“NAB’s latest BNPL offering is different from CommBank’s BNPL offer and most other BNPL providers in that it doesn’t charge a late fee. It’s essentially a revolving line of credit that consumers pay nothing for, apart from the purchase cost,” Ms Zahos said.
NAB group executive of personal banking Rachel Slade said because users were already bank customers, their banking and credit histories were easily accessible.
“Hundreds of thousands of NAB customers are using instalment payment services so we’ve created NAB Now Pay Later to make this option simple and digital for them,” Ms Slade said.
Customers who pre-register for NAB Now Pay Later via the NAB website will get first access to apply for the product from its expected release in July.
HOW DOES IT COMPARE?
To find out how NAB Now Pay Later compares to other major BNPL players in the market, including Afterpay, ZipPay, Humm and CommBank’s Step Pay, Canstar analysed the costs associated with making a $500 purchase as well as the cost of missing a payment on a $150 purchase.
Their analysis shows NAB Now Pay Later is the only BNPL service that doesn’t charge late fees along with PayPal Pay in 4, making it a cost-effective option alongside its competitors.
Both Afterpay and CommBank’s StepPay charge late payment fees of $10 for the first missed instalment, while ZipPay, Humm and Klarna also charge late payment fees of $6 or less.
When looking at the cost of missing one $150 payment across several BNPL providers, the Canstar analysis shows NAB Now Pay Later and PayPal Pay in 4 customers would pay $0 in fees, making both of these services the most cost-effective options.
Both Afterpay and CommBank’s Step Pay customers would pay the highest percentage in fees, totalling 6.67 per cent of the original purchase value after the first missed payment.