You can now put your insurance premium on buy now, pay later
On Tuesday, CoverPay launched a new BNPL “Get Cover, Pay Later” platform for general insurance.
CoverPay today launched the first BNPL-type product for the P&C insurance market and will start rolling out through insurers from October 2021.
The platform distributes the invoice amount over 12 bi-monthly payments for the customer and pays the merchant in full.
CoverPay is technically interest-free, although a flat “plan management fee” of $ 7 is applied to each payment.
Initially, Coverpay will allow users to create a payment plan up to $ 2,500, but users can pay an invoice up to $ 5,000 and pay the amount over $ 2,500 as a deposit with their first payment. .
It can be used at checkout for selling fonts online, in payment portals, on invoices, or using built-in links.
Managing Director Steve Gilbert said CoverPay took inspiration from BNPL’s retail industry and dedicated it to a general insurance product.
“Consumers have clearly demonstrated their willingness to support payment experiences that offer fair terms, transparency and control without hidden hassles,” said Gilbert.
“These are our guiding principles as we built the platform with a strong focus on positive customer outcomes. ”
“When it comes to online policy sales specifically, the platform is integrated with a merchant’s payment experience.
“If the customer chooses Coverpay as their payment choice, we identify the customer within 2 minutes, make the first payment and formalize the payment plan.
“This plan is immediately available for the customer to manage in their portal and the merchant is paid the invoice amount in full.”
“Coverpay aligns perfectly with the seismic evolution of traditional credit and customer expectations for level playing field, transparency and control without any unpleasant surprises. “
The BNPL train moves on
Buy now, pay later for general insurance is just the latest adventure in an increasingly saturated market with BNPL platforms.
There are 24 BNPL providers in Australia, 12 of which are publicly traded.
There is also a proliferation of providers for niche purposes, such as paying a rental deposit and for fragmented real estate.
In Australia, BNPL providers are not subject to the National Consumer Credit Protection Act of 2009, like other forms of credit, because lenders with terms of less than 62 days are not subject to the law.
A Senate inquiry in September 2020 concluded that BNPL providers are able to “self-regulate, much to the chagrin of consumer groups such as Financial Counseling Australia (FCA).
“If he looks like a duck and quacks like a duck, he’s a duck.” BNPL is credit and should be regulated like other credit products, ”FCA CEO Fiona Guthrie told Savings.com.au in 2020.
Research also suggests that many Australians do not understand how BNPL applications can impact their credit score.
Following Square’s acquisition of Afterpay last month, questions have arisen about BNPL’s long-term future in Australia.
Recently, Afterpay also announced retroactive BNPL payments, which has ruffled various payment experts and consumer groups.
Image by Ibrahim Ozdemir via Unsplash