New buy-now-pay-later service bundll targets everyday spending

ASX-listed financial services provider Flexigroup has launched a new buy-now-pay-later (BNPL) service bundll, which targets an area not yet covered by the big players: everyday spending.

For customers, there is no minimum spend to use the service, which can facilitate multiple payments up to $1000. The lower payment bracket encompasses smaller expenses, including coffee, groceries, petrol and dinners.

Weekly expenses are “bundled” into one debt and customers have two weeks to pay it off, but they have the option to pay a flat fee of $5 to delay or ‘snooze” their repayments further.

While customers using BNPL companies are usually limited to the retailers that have signed up as a partner, bundll removes this limitation as transactions are processed through the Mastercard network.

This means unlike traditional BNPL businesses like Afterpay, which makes most of its money from charging retailers to be on its platform, bundll can be used with any retailer, online or in-store, that accepts MasterCard.

Under this arrangement, retailers don’t need to pay to offer bundll as a payment option.

Flexigroup’s chief executive officer Rebecca James said the business is focusing on spending that’s usually paid with debit cards.

“We know that our millennial customers prefer debit to credit, like to budget and don’t want to pay interest. While under-35s represent only 23 per cent of credit card holders, they speak for over 48 per cent of buy-now-pay-later users,” she said.

“Furthermore, debit cards surpassed credit cards as a preferred payment method for under-35s during 2019.”

Expanding market

Flexigroup already operates BNPL provider humm, which competes with AfterPay and Zip.

Eyeing potential down under, Swedish BNPL company Klarna launched in the Australian market recently. The service allows buyers to manage their online shopping, deliveries and returns in one place.

The new market entrant is backed by the Commonwealth Bank of Australia, which tripled its stake in Klarna to 5.5 per cent.

The investment may be seen as a smart move, with BNPL users surging from 1.38 million to nearly two million in the 12 months to September 2019, Roy Morgan research indicates.

But despite this strong growth, about 9 per cent of Australians are using BNPL services, which Roy Morgan notes is “still relatively low”.

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