Trending Financial News 29 August

Older Aussies still repaying the mortgage

Average mortgage debt among older Australians, over 55 years, has soared from $27,000 to more than $185,000, according to the Australian Housing and Urban Research Institute (AHURI).

In 1987 only 14 per cent of older Australian home-owners were still repaying their mortgage. That share increased to 28 per cent by 2015.

Professor Rachel Vifor told Broker News that one of the “increasingly likely outcomes” of this trend is Aussies being forced into longer working lives.

New Buy Now, Pay Later service launched

Consumer finance provider Flexigroup has announced a new buy now, pay later service in partnership with Mastercard.

Flexigroup’s buy now, pay later service will be called Bundll and will allow customers to bundle repayments for multiple purchases into a single instalment payment plan.

Bundll will be offered to all Raiz customers who will be able to fund purchases from their Raiz account or round up Bundll purchases and invest the change via Raiz.

Bundll will be launched before Christmas 2019.

Bundll takes on Afterpay

Flexigroup’s new Buy Now Pay Later service will be a “category killer” said Flexigroup chief executive Rebecca James.

“It’s like a debit card on steroids really.”

Bundll is potentially a free service for both the shopper and the retailer, whereas Afterpay costs the retailer up to 6 per cent.

Bundll gives shoppers two weeks to repay their purchase with without fees, interest or other charges. They then get the option to extend their repayment period for another fortnight for $5.

A Superbundll option allows users to extend again to six fortnightly payments for 5 per cent of the total balance.

New Aussie PayPal growing fast.

PayPal Australia’s domination of the local ecommerce payments market is under threat from Melbourne-based electronic money provider, iSignthis.

iSignthis shares have risen from a low of 14 cents in January to $1.21 this week as it applies to regulators to become only the second holder of a purchased payments facilities licence in Australia alongside PayPal.

iSignthis CEO John Karantzis said the business will give local retailers and consumers a cheaper alternative to bank issued debit and credit cards. The iSignthis model is similar to PayPal. iSignthis recently secured membership of the Visa card scheme.

Disclosures no longer good enough says ASIC

ASIC has warned the big banks that tougher enforcement and prosecution action is coming. The chairperson of ASIC, James Shipton told an industry conference yesterday that bank disclosures are no longer enough to protect consumers.

Instead the regulator will simply intervene if it thinks a loan or other banking product is unfair to customers.

ASIC “is focused on effective action, particularly cases that have a high deterrence value and those responding to egregious misconduct,” said Mr Shipton.

Since February 2018, there has been a 74 per cent increase in ASIC investigations involving the big six banks – Commonwealth Bank, Westpac, NAB, ANZ, Macquarie Bank and AMP Group.