(18 August 2023 – Australia) Commonwealth Bank will launch a new payments service known as Powerboard next month as it looks to protect its grip on transaction data.
Powerboard, which was first announced in December and is in its pilot stage this year, is an interface for businesses to manage payment collection from various providers, including from buy now pay later services, while allowing CBA to keep visibility of critical data used to assess credit risk.
It is now eight months since CBA first announced Powerboard as its payments project. Its group executive for business banking, Mike Vacy-Lyle, admitted that getting the product out to the market had been complex.
“It is a much tricker sell, as you do need specialist salespeople, so it is a longer sales conversation with the customer,” he said. “But we will be going out to the market in early September, and we will start distributing the product at scale. It will be a serious game changer for the mid-market.”
Mr Vacy-Lyle said CBA “probably sweat payments more than any of our competitors – it is certainly the conversation that I am involved in the most at the moment”.
Although NAB remains the biggest business bank by loans, CBA has the largest “main financial institution” (MFI) market share and the largest deposit book. Powerboard is core to its plan to catch up with NAB on lending and to win more business transaction accounts. This would provide the insights to let the bank deepen its relationships – and then lend.
CBA said in its full-year results last week that 90 percent of its $35 billion in new lending to businesses over 2022-23 went to customers who already had a transaction account.
“We are all about the primacy of relationship,” Mr Vacy-Lyle said. “We want to make sure we keep the MFI, and we conduct the [payments] orchestration direct with customers, on the back of information we have.”
Powerboard is also a defensive response to Afterpay and Zip, which obstruct the banks’ view of the nature of products being sold. That’s because the buy now, pay later provider typically appears as the “merchant of record” when transactions are made.
But when buy now, pay later providers – or PayPal – are connected to PowerBoard, CBA will get complete visibility of the transaction data, an increasingly valuable commodity in banking.