Citi Australia has announced its new Buy Now Pay Later (BNPL) product Spot, to be available from October for use anywhere Mastercard is accepted; online, in-store, overseas and in Australia.
Much like other BNPL products, Spot will allow customers to split a purchase into four fortnightly payments, with no interest charges. For purchases over $200, customers will have the option to pay a flat $10 fee to further break down the purchase into eight smaller fortnightly payments.
Spot is to be issued by Citi affiliate entity, Diners. Approved customers will gain access to an account limit of up to $1000, which can be managed via the Citi mobile app. Spot can be linked to a bank account of the customer’s choice, rather than being limited to a specific institution.
On the merchant side, Spot is understood to charge no extra fees for use and require no extra technical integration, with Spot leveraging Mastercard’s existing payment network.
Pre-registration for Spot is open now to both consumers and merchants, with earlybird offers available, including a draw to win one of ten $1000 shopping vouchers.
Citi Australia head of cards and loans, Choong Yu Lum, described Spot as a “global first” for Citi, adding that success in Australia could see Spot rolled out worldwide.
“How Australians use credit is evolving, and there remains an opportunity for new players to step in and listen to consumers who are sending a clear message they want innovative payment solutions to help them manage their finances,” Mr Lum said.
“While some may have the perception that buy now pay later tools are the domain of young Australians purchasing fast fashion – this view is outdated, and this payment method has much greater appeal across demographics and purchasing categories,” Mr Lum added.
According to Citi research from late 2020, while 98% of Australian credit card holders are aware of major BNPL services, only 25% have actually used them.
How to avoid getting into trouble using BNPL platforms:
- Read the terms and conditions and understand what fees you could get hit with.
- Set yourself strict spending limits.
- Limit yourself to one platform, and one purchase at a time.
- Don’t impulse buy. Sit on any major purchases for at least 24 hours.
- If you get into trouble, pull the pin and call for help. Each platform should have a hardship policy to help you get out of trouble.