Buy now pay later company Afterpay is the first business to use Westpac’s “banking as a service” solution, the bank announced today. The deal will allow Afterpay to offer its customers Westpac’s transaction and savings accounts and money management tools.
Westpac announced plans in November to partner with 10x Future technologies, a UK-based cloud banking provider, to build a new core banking stack that allows third parties to offer Westpac banking products through APIs.
The new stack runs separately from the bank’s existing business as a standalone platform, but Westpac has said it could eventually be integrated back into its own core operating environment to lower costs and improve flexibility.
That makes the Afterpay partnership an important test for the 10x platform which uses cloud native technology, a model big banks are cautious to adopt widely because of regulatory, security and compliance hurdles.
Westpac expects the platform to be up and running for Afterpay’s 3.3 million customers in Australia by Q2 2021, giving them access to Westpac transaction and savings accounts and other cashflow management tools.
“Fintech innovation is changing banking in important ways and our new digital banking platform is part of our long-term strategy to support this trend and better respond to changing customer needs,” Westpac CEO, Peter King, said in a statement.
“The platform allows us to combine our banking experience with the innovation of our partners to support new customer experiences.”
Afterpay CEO, Anthony Eisen, said, “We believe Australians deserve greater support and insight to help manage their money. Together with the power of our retail platform, the latest banking technology from 10x, and the support of Westpac, we will begin by offering cashflow management in a simple way.
“Afterpay is in a unique position to extend and deepen the relationship with our customers and help them to manage their money more seamlessly through savings and budgeting tools. For Afterpay, this is clearly just the beginning as we explore this opportunity globally,” he said