CBA rejects claims of stifling BNPL competition

Joseph Brookes
Senior Reporter

Australia’s biggest bank has rejected the charge it is urging customers to close Buy Now Pay Later services to improve their prospects of a home loan, and that they are offering them credit cards as a replacement.

A Parliamentary Joint Committee on Corporations and Financial Services this week heard evidence that Australian banks are advising loan applicants to close Buy Now Pay Later (BNPL) services to proceed with mortgage applications.

Australian BNPL company Zip told the committee banks are assessing its service in a “negative light”.

“The number one reason for customers closing their Zip account is that the bank has told them they need to in order to proceed with the mortgage,” Zip co-founder and chief operations officer Peter Gray told the inquiry.

CBA has rejected a claim it is treating BNPL unfairly. Photo: ArliftAtoz2205 /

Mr Gray said banks are concerned about the level of engagement BNPL services have with consumers. Zip launched 2013 and now claims more than seven million users at an average age of 37.

“We’re clearly a competitive threat in the way we’ve provided clearer, transparent and more fair solutions to what’s traditionally been [bank’s] target market. It’s a concern to them,” Mr Gray said.

He said banks needed to answer whether they are instructing BNPL users to close accounts in order to settle a mortgage, and suggested they may be offering them credit cards as a replacement.

At the same inquiry the next day, Commonwealth Bank of Australia chief executive Mathew Comyn refuted the claim, saying BNPL services are not treated any differently to traditional credit products in loan applications.

“I have not seen or heard anything like that in the industry,” Mr Comyn said.

CBA offers its own BNPL service through its stake in Swedish provider Klarna, which integrates with the bank’s app.

Mr Comyn said customers can be advised to consolidate credit products to increase their borrowing capacity in situations like a first home loan. But he said BNPL services are treated no differently by CBA or others.

“I’ve not seen any evidence of targeting of particular products across the industry,” he said.

The CBA chief also challenged BNPL provider claims their users typically have a better credit record than bank customers, saying it is an “area of ongoing contention”.

“We see higher incidents of customers going into arears, higher instances  of customers going into overdraft, higher instances of customers – as proportion of BNPL – that are receiving financial assistance,” Mr Comyn said.

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