Afterpay shares crashed through the $100 barrier after announcing a savings account deal with Westpac

Shares in Melbourne-based buy-now-pay-later fintech Afterpay are up more than 5% in the first hour of trade this morning to top $100 after the company announced it had signed a deal with Westpac to offer savings accounts and cash flow tools to its Australian customers.

The partnership will allow Afterpay (ASX:APT) to provide Westpac (ASX: WBC) transaction and savings accounts and other cashflow management tools to its 3.3 million customers in Australia.

In a statement to the ASX this morning, Afterpay said: “further services and tools will be introduced over time to drive even more benefits to customers”.

Afterpay as the first partner on Westpac’s new digital banking platform, which uses cloud-native technology from 10x Future Technologies and allows the bank to partner with other companies to offer banking services.

Westpac CEO, Peter King, said the deal reflects the bank’s strategy to meet the changing needs of customers.

“We look forward to launching our platform in Q2 with Afterpay and will continue to work together to identify ways in which our partnership can add further value to consumers,” he said.

“Fintech innovation is changing banking in important ways and our new digital banking platform is part of our long-term strategy to support this trend and better respond to changing customer needs.”

Afterpay CEO and Managing Director, Anthony Eisen, said the new offerings “build on our core principle of encouraging responsible spending and enabling financial wellness”.

“In deepening our relationship with our customers we will gather greater insights into how they prefer to manage their finances and better understand their savings goals. This will allow us to assist them to budget more effectively and avoid debt traps,” he said.

“We applaud Westpac’s foresight in curating this innovative digital platform and welcome their desire to partner with Afterpay to meet the changing needs of a powerful next generation of customers.”

Customers will be able to use the new savings account to conduct the majority of their money management activities, including paying bills, withdrawing cash and budgeting, with the company said linking it to their existing Afterpay account “will deliver further insight into how customers prefer to manage their finances, what their savings goals are, and how responsible spending behaviour can be further encouraged and rewarded”.

The fintech said the collaboration also brings efficiency benefits to Afterpay’s existing activities from a risk management and processing cost perspective and has the potential to facilitate new revenue streams over time, without needing to develop traditional banking or credit products.

Afterpay Executive Vice President of New Platforms, Lee Hatton said adding the new money management tools and products allows them to leverage their insights.

“The collaboration accelerates Afterpay’s ability to bring these additional customer offerings to market in that we can leverage established banking infrastructure and regulatory foundations to develop and deliver new services and more positive outcomes for our customers,” she said.

“The advanced core technology available around the world today means we are well placed to ultimately provide these services to our 10 million plus customers across our global footprint.”

Afterpay shares hit a new record high of $102.69 in the first hour of trade on Tuesday following the announcement, a jump of 5.29%.

Today’s leap through the $100 barrier is the latest astonishing benchmark in the company’s share price since it plunged to $8.90 on March 23 this year as uncertainty about the impact of Covid-19 hit markets.

Afterpay’s market capitalisation now sits at close to $29 billion.