Citi Australia is taking on local buy now, pay later vendors Afterpay and Zip, joining forces with online retailer Kogan.com to allow credit cardholders to enter into an instalment loan at checkout.
To access the service, customers need to log onto or create a Kogan.com account, enrol their Citi credit card, and select to pay with instalments at the checkout, with offers to pay over 3, 12, 18 or 24 months displayed in real time.
Slated for launch in October, the instalment loan feature is available for Citi credit cardholders and some Citi white-label credit cards, including Suncorp and Bank of Queensland.
According to Citi research, while 95% of surveyed Australians are aware of instalment loan services, only one in five have taken advantage of current offerings from non-bank fintech firms. While 58% are confident a traditional lender would provide a reliable service, only 23% think a non-traditional lender could do so.
Citi’s head of cards and loans Choong Yu Lum said, “The buy now pay later sector has seen rapid growth, increasing five-fold in the last two years alone We think it’s great for consumer choice that there are a number of players offering buy now pay later options. At Citi, we aim to target those consumers who are more comfortable using a traditional lender.”
Cardhiolders who take up the option can also embed 'shop with points' rewards from Kogan to pay off part of their loan.
“We know 78% of surveyed Australians are concerned about their debt, and through both our shop with points and instalment offers, we aim to give our customers choice when it comes to how they want to pay for their purchases,” says Lum. “The younger generation is particularly concerned about debt, with 87% of millennials identifying themselves as concerned. This generation is also the primary user of buy now pay later services, reflecting their willingness to use new tools for money management.”