Afterpay (ASX:APT) share price wobbles on CommBank BNPL news

The Afterpay Ltd (ASX: APT ) share price is wobbling this afternoon after Commonwealth Bank announced its latest BNPL competitor product.
The post Afterpay (ASX:APT) share price wobbles on CommBank BNPL news appeared first on The Motley Fool Australia. –

asx share price competitions represented by businessmen arm wrestling

The Afterpay Ltd (ASX: APT) share price took a hit in afternoon trade after news broke that Commonwealth Bank of Australia (ASX: CBA) is launching its own buy now, pay later (BNPL) product.

Following the announcement, shares fell as much as 2.5% before staggering back. At the time of writing the Afterpay share price is up 0.4% to $112.20.

Afterpay’s fiercest Australian challenger yet?

This afternoon’s price movement comes after Commonwealth Bank revealed its new CommBank BNPL product, reported by The Australian Financial Review. The offering will enable its 4 million retail banking customers to pay in four instalments anywhere Mastercard is accepted.

The real crunch factor is merchants won’t need to pay any more than the traditional card fees on CBA’s BNPL product – a significantly lower cost than approximate 4% currently charged by competitors such as Afterpay and Zip Co Ltd (ASX: Z1P).

Commonwealth Bank’s offering will be available for purchasing a broad range of items, including household bills and groceries. At present, the service will accommodate payments between $100 to $1,000 across four fortnightly transactions.

Unlike Afterpay, CommBank will conduct credit checks on its customers. As Commonwealth Bank group executive for retail banking services, Angus Sullivan stated, “We are going to treat it like it is credit.” This is a classification that Afterpay and other buy now pay later providers refute.

Klarna and CBA, it’s complicated

Making everything a tad more complicated, the CommBank BNPL is a separate offering to Swedish-based BNPL, Klarna. In July last year, CommBank invested US$300 million into Klarna and built-in an onboarding for it directly into the Aussie banking app.

Despite growing rapidly in the United States, Klarna hasn’t been able to replicate quite the same success in Australia.

Afterpay share price boils down as competition heats up

The Afterpay share price has certainly felt the pinch from a recent push from competitors. Over the last month, Afterpay’s fall from grace has erased more than 25%. If the tech selloff in February wasn’t enough, the news of Paypal (NASDAQ: PYPL) bringing ‘pay in four’ to Aussie shores added further pressure.

However, to keep it all in context, Afterpay’s share price is still up more than 380% in 12 months. As a result, Afterpay’s market capitalisation has grown to one-fifth of Commonwealth Bank’s $153 billion size.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Mitchell Lawler owns shares of AFTERPAY T FPO and Commonwealth Bank of Australia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends PayPal Holdings. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO and recommends the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended PayPal Holdings. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Afterpay (ASX:APT) share price wobbles on CommBank BNPL news appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!