Comparison sites and commentators have given Money by Afterpay a lukewarm reception, pointing to the lack of any outstanding features or rates, and the absence of some basic functionality including BPAY.
Launched last week, Money by Afterpay includes a transaction account that comes with a physical debit card and can also be added to an Apple Wallet. There is also a savings account that can be set up with a number of sub-accounts.
The accounts are provided by Westpac under a white label arrangement.
A “round-ups” feature will round purchase amounts up to the nearest dollar and deposit that amount into a savings account. The round-up can be adjusted by using a multiplier to increase the amount saved.
Afterpay Retro will allow customers to retrospectively turn a transaction into an Afterpay payment and pay it in four instalments.
It also has a “social media style” feature called Money Stories that promises to provide personalised financial insights that are updated regularly based on customers’ spending and saving records.
And Afterpay’s rewards program Pulse will be integrated into the package so that, for example, customers can earn points for reaching a savings goal.
RateCity liked the offer of a fee-free transaction account (including no currency conversion fees) and the attachment of rewards to the transaction account.
It was less impressed by the rate on the savings account. Afterpay is offering 75 basis points on the first A$50,000, with no requirement to make regular deposits.
“There are 18 banks offering ongoing savings rates that are higher than this, if you meet their terms and conditions,” RateCity said.
ING Bank has an ongoing savings rate of 1.35 per cent, with the requirement that customers deposit $1000 a month and make five transactions a month using a linked transaction account.
Westpac is offering 2.5 per cent on up to $30,000 for customers aged 18 to 29 (similar to Afterpay’s target market), with the requirement that savings are added each month and five purchases made with a linked account.
Canstar was similarly ho-hum about the savings rate, pointing to Macquarie Bank’s Savings Account, which offers an ongoing rate of 95 bps with no conditions and Volt’s savings rate of 90 bps.
And Virgin Money’s Boost Saver offers 1.5 per cent, with a number of conditions.
On the fee-free transaction account, Canstar pointed out that 68 per cent of the transaction accounts on its database do not charge account fees.
Payment Services managing director Brad Kelly said there is no BPAY function, no PayID (only Osko with BSB and account number) and no eftpos capability in the Apple wallet.
Kelly said: “How can you offer your customers a bank account without this base level of functionality and call it innovation?”