* Afterpay shares jump 6%, passing A$100-mark
* Westpac deal may lower loss rates, costs - analyst
* Afterpay gets deeper look at users' financial habits
Oct 20 (Reuters) - Australian buy-now-pay-later firm
Afterpay Ltd will team up with Westpac Banking Corp
to offer savings accounts, the two companies said on
Tuesday, signalling a shift by the alternative credit firm into
The accounts will be available to Afterpay's three
million-plus customers in Australia from next year through
Westpac's digital banking platform, and will help give the firm
greater insight into its customers' financial habits, it said.
The announcement sent Afterpay's shares up 6% and past the
A$100 mark for the first time, highlighting the staggering rise
for a stock that was at just A$8 in March.
For Westpac, which last month reached a record A$1.3 billion
settlement with Australia's financial crime agency for allowing
illicit payments, the venture marks a push into fintech and will
help it target younger customers.
Afterpay will be Westpac's first digital banking platform
customer, and the Melbourne-based firm will also offer budgeting
tools and other services over time. The partnership goes live in
the second quarter of 2021.
Afterpay and its buy-now-pay-later peers, who let users buy
goods and pay over interest-free instalments, have been heralded
as disruptors of traditional credit and have surged in
popularity as the coronavirus crisis accelerates the shift
RBC Capital Markets analyst Tim Piper said in a note that
processing repayments through Westpac could lower costs for
Afterpay, while more customer data could result in "better
credit decisioning and potentially lower loss rates."
While Afterpay currently does not conduct credit checks on
its customers, it says the tie-up opens the door to new revenue
streams and could be adopted globally.
"We will gather greater insights into how they (customers)
prefer to manage their finances and better understand their
savings goals," Afterpay Chief Executive Anthony Eisen said.
Rival Zip Co Ltd also on Tuesday expanded its
in-store offering for users to any store that accepts Visa
, widening the company's presence.
(Reporting by Nikhil Kurian Nainan and Anushka Trivedi in
Bengaluru; Editing by Cynthia Osterman and Richard Pullin)