Finance

Commonwealth Bank reveals when its ‘buy now, pay later’ service to challenge Afterpay will be on offer

The nation’s biggest bank, the Commonwealth Bank, will offer its own buy now, pay later service to customers from mid-year in a move to challenge Afterpay.

Customers can use their debit and credit cards to access the service for purchases between $100 and $1000 and pay in four fortnightly instalments.

Buy now, pay later services have proven popular with young people as they do not charge interest but instead levy late fees for missed payments.

Yet providers such as Afterpay and Zip make most of their money from the fees charged to businesses in each sale.

CBA said providers charged about four per cent, which cost businesses hundreds of millions of dollars each year.

The Commonwealth Bank will offer its own buy now, pay later service to customers from mid-year. Credit: AAP

Businesses would not pay an additional fee using its service.

Individual CBA customers must apply to use the service and will be assessed before approval.

This is not the bank’s first foray into this payment type.

CBA already has a sizeable investment in buy now, pay later provider Klarna, which is also available to people who are not customers of the bank.

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