Own NAB shares? Experts reveal what makes the bank’s BNPL product ‘stand out from the pack’

Avid owners of National Australia Bank Ltd (ASX: NAB) shares will likely be across the buy now, pay later (BNPL) offering the bank revealed yesterday.  

For those unacquainted, NAB Now Pay Later is set to launch in July and will follow the same basic premise as many other BNPL offerings – allowing customers to split purchases into four fortnightly payments.

It will also be able to be used anywhere Visa Inc is accepted. Meaning customers can use the product in the likes of supermarkets and petrol stations.

NAB Now Pay Later’s intricacies and timing have experts predicting it will be popular among shoppers.

Experts give NAB Now Pay Later the thumbs up

Those invested in NAB shares will soon have their own slice of the BNPL pie. The bank has begun accepting pre-registrations from its own customers interested in using NAB Now Pay Later.

And unlike most other BNPL products, the offering will abandon late fees entirely.

“It’s essentially a revolving line of credit that consumers pay nothing for, apart from the purchase cost,” Canstar money expert Effie Zahos commented. She continued:

NAB does a credit check on all customers who apply, so it’s essentially BNPL with parameters. Not all customers will be approved, and their limit will be assessed individually. Likewise, if they’re late on a payment, NAB will block their BNPL account … so there are safety barriers in place.

Zahos said the application process makes NAB Now Pay Later “stand out from the pack”. Though, she noted “a ‘free’ revolving line of credit can lead to dangerous spending behaviours.”

It has also impressed Griffith University personal finance expert Dr Tracey West.

West told Canstar that NAB Now Pay Later’s application process made it preferable to other BNPL offerings. She hopes its launch might take business from “more predatory finance companies”.

Additionally, releasing a BNPL product in the current inflationary environment will likely see demand for it soar.

“The timing of NAB’s BNPL product offering is perfect,” Zahos said. “It’s never been more expensive to be living.” She added:

Inflationary pressures may see BNPL providers that restrict purchases to certain retailers … at risk of dampening demand. Those providers such as NAB that allow consumers to BNPL on necessities like groceries may find the cost of living drives even more business their way.

NAB share price snapshot

The NAB share price is in the green on Friday, lifting 0.7% to trade at $31.79. For context, the S&P/ASX 200 Index (ASX: XJO) is also up 1.05% right now.

The bank’s stock has gained 8% since the start of 2022. It’s also nearly 19% higher than it was this time last year.

The post Own NAB shares? Experts reveal what makes the bank’s BNPL product ‘stand out from the pack’ appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Visa. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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