'Buy now, pay later' company Afterpay Ltd — owned by Jack Dorsey's Block Inc (NYSE: SQ) — and Westpac Banking Corporation (OTC:WEBNF) have ended their partnership after the Australian payments firm rolled back a smartphone app it was running with the bank.
What Happened: Westpac, in a statement emailed to Benzinga, confirmed the tie-up termination, reported earlier by Reuters, saying it will support existing 'Money by Afterpay' customers to transfer funds to accounts of their choice or provide competitive offers to those who choose to stay with the bank.
Afterpay said it would integrate its products with its Block’s "ecosystem" instead, according to the Reuters report.
Dorsey has said earlier that he expects Bitcoin (CRYPTO: BTC) to be the driving force of Block’s business expansion across the globe.
Why It Matters: The decision closes off an avenue for Westpac to engage with younger customers who prefer more smartphone-friendly, less regulated financial products like those offered by Afterpay.
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Lee Hatton, head of the decommissioned app, reportedly said, “Our decision to move in this new direction is due to our exciting next chapter with Block, particularly as we think about Cash App opportunities here in Australia."
The report also mentioned that Afterpay would stop signing on new users immediately and close the app on Oct. 10.
“A change of ownership naturally sees partnerships evolve," said Damien MacRae, CEO, Westpac BaaS in an emailed statement to Benzinga. "Westpac is well placed to continue to leverage the capability from our partnership with cloud-native platform 10x,” MacRae said.
Price Action: OTC shares of Westpac ended Thursday at $14.98 and surged over 15% in after-hours trading, while Block shares ended marginally lower at $74.64 before shedding over 1.1% in after-hours trading, according to data from Benzinga Pro.
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