Afterpay CEO dismisses threat from CBA’s big investment
Afterpay chief executive Anthony Eisen has hit back at Commonwealth Bank’s entry into the “buy now pay later” sector, declaring Swedish rival Klarna was more like a traditional lender, and that it would do nothing to derail Afterpay’s United States growth aspirations.
Just hours after CBA announced it had invested $US100 million in Klarna, its chief executive Matt Comyn provocatively told reporters one of the bank’s intentions entering the instalment payments sector “would be to lift standards” in the sector.
“We believe we can play a role in that,” he said.
But Mr Eisen suggested the bank was better off getting its own house in order, rather than criticising behaviour in other sectors.
“As the royal commission has proven, the banks do not set the standard for best practice,” he told The Australian Financial Review.
Controversially, Afterpay is not bound by the National Consumer Credit Protection Act, because its instalment service is not considered a lending product.
Yet Mr Eisen, who shifted from executive chairman to Afterpay CEO in July, said Afterpay is regulated by ASIC’s new product intervention power and is working on a code of conduct for the sector.
Klarna, and another US rival Affirm, charge interest rates on instalment payments at rates similar to credit cards; while in Australia, Afterpay competitors Humm, Openpay and Zip offer longer term loans for larger amounts.
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