Latitude Financial is throwing its hat into the buy-now-pay-later (BNPL) ring, launching LatitudePay in partnership with Harvey Norman.
The fintech promised to cut fees for merchants who adopt the new digital payments platform early, while offering online shoppers the opportunity to divide payments into 10 instalments over 10 weeks interest-free.
Announced yesterday, LatitudePay has also committed to “acting responsibly” with compulsory credit and ID checks for consumers.
Latitude Financial, formerly GE Capital Finance, specialises in consumer finance and loans. Together with Australian retail giant Harvey Norman, this venture aims to help consumers looking to make smaller purchases online.
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The launch comes just weeks after Commonwealth Bank announced a $100 million investment into Swedish payment platform Klarna, sharing the stakes with rapper Snoop Dogg.
Both are set to rival Afterpay, the dominant BNPL player, and expand the options for Australian consumers.
The payment method is quickly overtaking credit cards as the preferred option for younger shoppers in particular.
In November 2018 report, the Australian Securities and Investments Commission found a decline in credit card users and an increase of BNPL consumers dealing with financial difficulties. The findings showed one-in-six experiencing overdrawn accounts, late payments or having to borrow money to meet obligations.
The $903 million industry, however, is on the rise, with an increasing number of competitors entering the space.
LatitudePay hopes to set itself apart with a 90-second sign-in to accommodate its credit and ID checks, with instant approval for purchases between $150 and $1000. Following the industry standard, no fees or interest rates will apply for payments made on time.
While Afterpay charges merchants a flat 30% fee plus commission, LatitudePay will follow Klarna in offering a more flexible model.
For merchants who sign up before January 2021, it will impose no fees for purchases under $250. The fees for purchases between $250 and $1000 will then be segment-leading.