Westpac is rethinking its alliance with Afterpay following its $39 billion acquisition by Square, who may be levelling up to compete within the banking sector.
Afterpay still has plans to launch ‘Afterpay Money’ in October, which Westpac will partner in, providing banking services to Afterpay customers. Afterpay obtained a licence from ASIC to issue debit cards, distribution deposit banks, and provide general financial guidances.
“We’re thinking through the strategic implications given Square’s interest in merchant acquiring and business loans,” a Westpac banker told AFR, adding that it’s too early to make a decision.
Square said in April it was planning to launch a business loans division in Australia. It became an official bank in the US in March, scoring a banking licence in Utah.
In April, Square Australia’s head of industry and payments, Samina Hussain-Letch, told AFR that becoming an Australian bank :is not in the plans” initially, but “is something we might consider when time is right”.
Square founder and CEO Jack Dorsey said, in an earnings call earlier this week, that he was keen to reach sellers and larger merchants that it had not serviced in the past.
“For us to be able to scale from the smallest of shops in your neighbourhood, up to the largest retailers in the world, with one solution that brings people to the rest of our ecosystem is exactly our strategy.”
