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UPDATE 1-CBA to launch 'buy now, pay later' option in mid-2021

· 03/16/2021 21:57
UPDATE 1-CBA to launch 'buy now, pay later' option in mid-2021

Adds details, executive comment, background

- Commonwealth Bank of Australia CBA.AX unveiled on Wednesday its new "buy now, pay later" (BNPL) offering, which it plans to begin rolling out to eligible customers in mid-2021.

A surge in online shopping due to coronavirus-induced lockdowns led to a feverish appetite for BNPL products and catapulted companies operating in the sector, including Australia's Afterpay APT.AX, to become industry bellwethers.

U.S.-based PayPal PYPL.O said earlier this month it would launch its BNPL option in Australia in June, while Swedish payments firm Klarna, widely rumoured to be considering a public listing, recently became the most valuable European startup. nL4N2L814O nL5N2KZ3JC

CBA is already an investor in Klarna.

Australia's largest lender said its BNPL option includes a limit of A$1,000 ($772.80) and late fees of A$10 per missed instalment repayment. (https://bit.ly/3ttQ57W)

The service "complements and underscores our investment in Klarna and our joint venture business here in Australia which offers both CBA and non-CBA customers huge opportunities to connect with domestic and international retailers," said Angus Sullivan, group executive of retail banking services.

($1 = 1.2940 Australian dollars)

(Reporting by Shashwat Awasthi in Bengaluru; Editing by Rashmi Aich)