Afterpay Releases New App: Is Now the Time to Buy?


By Dale Gillham |


The war between the big four banks and the buy now pay later (BNPL) space heated up last week as Afterpay released its new money app, which is targeting Gen Z and millennials, and is another move forward in Afterpay becoming more like a bank.

As I have stated in previous reports, the big four banks are good at sitting back and watching others take the risk to develop a market before entering, and this is very much what they have done in the BNPL space. Two weeks ago, Westpac joined CBA in offering a zero-interest credit card aimed squarely at the same marketplace as Afterpay. Given this, I suspect it won’t be too long before ANZ and NAB join the party.

The battle between BNPL providers and the big 4 banks

The big point of difference between the banks and those in the BNPL space is in the area of lending, and I believe the banks have a distinct advantage. It is one thing to provide a service where individuals can buy an item and pay for it over a month but Gen Z and millennials also need to be able to borrow for housing and other loans.

Another advantage the banks have is that they are already regulated with well-established compliance systems. Until recently compliance and regulation has not been a concern in the BNPL space. But ASIC has made it clear that they are looking at regulating this market, which is likely to add red tape for BNPL organisations, resulting in reduced profit margins.

That said, the banks can be old, stale and slow to move as they are all big elephants with old systems, while the BNPL space is the new frontier. So, the next few years will be interesting to watch as they release new products in an attempt to gain more market share.

The obvious winner in all of this will be the consumer, as more competition means lower prices, better services and better products. Right now, while some of the stock prices for the BNPL providers are not doing very well, I would still watch this space given that in 2022 it is likely we will see some nice movement especially with the larger providers. So while I commend Afterpay for releasing this new product, now is not the time to enter this stock.

What were the best and worst performing sectors last week?

The best performing sectors included Materials up 4.71 per cent followed by Industrials down 0.12 per cent and Financials down 0.56 per cent. The worst performing sectors included Healthcare down 3.43 per cent followed by Information Technology down 1.79 per cent and Consumer Discretionary down 1.22 per cent.

The best performers in the S&P/ASX top 100 stocks include Evolution Mining up 12.63 per cent followed by Northern Star Resources up 10.52 per cent and Fortescue Metals up 10.37 per cent. The worst performing stocks include Xero down 7.9 per cent followed by Ramsay Healthcare down 6.70 per cent and Cochlear down 6.59 per cent.

What's next for the Australian share market?

Last week, the Australian stock market failed to trade higher than the previous week given that in the first four days of the week it traded down over 1.5 per cent erasing almost all of the gains from the previous week. That said, it did rally late Thursday, which continued on Friday resulting in the All Ordinaires Index closing down 0.15 per cent for the week.

I have previously mentioned that over the past two years we have experienced many surprises where the market did not respond as we would normally expect. After the bullishness of the prior week, you could have reasonably expected to see the market continue to rise last week, however, this was not the case.

While the market did not trade higher than the previous week, the good news is that it also didn’t trade lower. Despite the market closing near its high last week, as previously mentioned it did close lower on four of those days, which indicates some weakness in the market. Given this, I would not be surprised to see the market fall for one or two more weeks before the uptrend recommences.

For now, good luck and good trading.

Dale Gillham is Chief Analyst at Wealth Within and international bestselling author of How to Beat the Managed Funds by 20%. He is also author of the award winning book Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in all good book stores and online.


#1 Leader in Stock Market Education

Invest in yourself. Study with Wealth Within now to fast track your stock market education and begin the journey toward financial freedom. Because lifestyle matters!


Learning Centre


Learning Centre

Talking Wealth Podcasts

Market Report Videos

Stock Market Show