- ASX-listed neobank Douugh will launch a buy now, pay later service called ‘Credit Jar’ in partnership with Humm.
- The interest-free product will offer up to $1,000 credit, with purchases paid off in six weekly instalments.
- Differentiating it as a “responsible” product, CEO Andy Taylor said it will be “very different to traditional point-of-sale BNPL offerings and represents a step change in the model”.
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The increasingly crowded buy now, pay later (BNPL) field will be forced to make room for a new entrant that promises to offer something quite different.
Douugh, the self-styled neobank turned ‘financial wellness app’, announced on Tuesday that it would be launching its own “responsible” offering, called ‘Credit Jar’, with its own distinct take on the budding fintech niche.
“Credit Jar is very different to traditional point-of-sale BNPL offerings and represents a step change in the model, because we are treating it as a credit product, which is what we strongly believe it should be,” CEO and founder Andy Taylor said.
The stance would appear to be a direct dig at Australia’s largest BNPL platform, Afterpay, which has variously claimed to be a “customer acquisition channel” and a marketing partner, and likened itself to Google and Facebook. All of this to mount its defence as to why it should not be regulated for what it functionally is: a credit product.
Evasive tactics aside, it’s not the only beef Taylor takes with its existing competition. He frames the longstanding criticisms of some BNPL platforms as differentiating factors for Credit Jar.
“Our solution will actually help boost a customer’s credit score when repaid on time, and will only be made available to people who can easily serve it as part of their everyday budget via our responsible lending criteria,” he said.
All BNPL platforms currently determine their own criteria, with the Australian government current;y content to allow platforms to self-regulate. The sector has even gone as far as to write their own voluntary code which is entirely non-binding.
Credit Jar follows a similar basic formula to the rest of the pack. With a proposed credit limit of up to $1,000, eligible customers will be able to use the service via the Douugh app and a virtual card service, with repayments made across six weekly instalments.
“It will also be used anywhere that Mastercard is accepted. We believe this additional feature has the potential to really drive new customer acquisition to the Douugh App.”
It’s not the first to jump into bed with a payment giant. Just last month Zip announced its own Visa partnership, expanding its reach to basically all purchases, and proving Zip co-founder Peter Gray’s thesis that card companies aren’t a competitive threat.
While listed on the ASX, and with designs to launch into the Australian market next year, Douugh is currently only live in the US where the likes of Afterpay, Zip, Klarna and others are battling furiously for market share.
In a partnership with Humm, Credit Jar marks its first foray into the American market as well, putting down $2.5 million to form the bedrock of a $12 million funding round. As part of the agreement, Douugh will be responsible for marketing, credit decisions, repayments, and customer service while Humm will take care of the BNPL technology, credit criteria and overdue collections.
“[As Humm] partners with America’s newest neobank, we are provide ghat we can take what we have learned locally and apply it on the global stage, disrupting the payments industry and providing better customer experiences across the world,” Humm CEO Rebecca James said.
Douugh says it will make money via a forthcoming monthly subscription fee, and will follow up with an automated money management tool and new managed investment features.
With the BNPL product likely to end up in Australia in the coming year, along with Douugh’s neobank services, it’ll ultimately be consumers who choose a victor.
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