Afterpay to target savings accounts using Westpac licence in challenge to major banks

First, it was taking on credit cards with "buy now pay later" - but now the global fintech Afterpay is turning up the heat on major banks by offering to take on deposits in savings accounts.

Afterpay doesn't have an official deposit-taking banking licence yet but it gets around that by stitching up a deal with Westpac where it will pay a competitive interest rate to hold a customer's cash.

Financial counsellors maintain the sector needs to be regulated as a credit product to protect consumers who buy now and can't pay later - especially as other players offer buy now pay later solutions for child care and private school fees.

So how significant is this incursion for Australia's established banks?

I speak on ABC NewsRadio with Afterpay executive vice-president Lee Hatton and Liberal senator Andrew Bragg who chaired a parliamentary committee in the fintech sector.