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As predicted above

Citi spotlights BNPLCiti spotlights BNPL 05 August 2021 5:53AM George LekakisCitibank, Citigroup Pty, Car loans & HP, Consumer lendingCiti Australia is about to join the banking industry’s assault on the buy now pay later sector, with the launch of a new BNPL brand in October.The bank will market the BNPL product – branded as “Spot” – through its Diners Club subsidiary, but using Mastercard’s payments network.Citi is the second local bank to signal a proprietary move into the BNPL market after Commonwealth Bank announced in March it was also partnering with Mastercard to take on Afterpay and Zip in the booming payments niche.Citi’s BNPL offer appears to be structured along similar lines to CBA’s soon-to-be-released StepPay product.The launch of Spot could be significant for Citi’s international operations, with local management indicating it could eventually become a global product line for the banking group.“This is a global first for Citi, and we’re confident that success in the Australian market could lead to a worldwide rollout of the new payment method,” said Citi Australia’s head of cards, Choong Yu Lum.Citi indicated that merchants would incur significantly lower fees than the four per cent impost levied by Afterpay on consumer purchases made through its scheme.“Accepting Spot is frictionless for merchants, who can offer the Spot Buy Now Pay Later product to their customers, with no extra fees for use or technical integration required,” Citi said in the press release.The bank clarified on the Spot website that all BNPL transactions would be funded through existing service fees levied on merchants for accessing to the Mastercard debit and credit card networks.“Only the standard merchant service fees for processing a card payment will apply for your business, which means a Spot Buy Now, Pay Later purchase at your checkout is the same as any other purchase made using a Mastercard credit account,” Spot tells merchants on its website.“So you can get the benefits of a buy now, pay later solution - like larger basket sizes and increased customer satisfaction - without the added cost.”Citi said that the Spot product would allow consumers to split a purchase into four fortnightly payments.Spot subscribers will have an option to pay a A$10 flat fee to break payments into eight smaller fortnightly payments.Citi has set a $1000 account limit for Spot users – the same cap as CBA’s StepPay.Citi said it would impose late fees on Spot customers who missed payments but did not reveal how much they would be.While the bank noted that its BNPL offer was subject to “terms, conditions and lending criteria”, it is yet to publish details of those terms and conditions on Spot’s dedicated website.However, that has not stopped the bank from offering incentives to prospective customers for pre-registering their interest in setting up a Spot account.The incentives include gift cards that can be used at leading retailers such as JB Hi-Fi and Myer.Customers who pre-register with Spot before the product launch in October are also eligible to win $1000 of spending money.