Why more investment companies are taking BPAY contributions

- By Collaborative Media & Publishing
When the COVID-19 pandemic struck last year, Sydney-based tech entrepreneur Gaby Rosenberg found herself working from home with enough spare time to get on top of her personal finances.
 
Fixed income investments – such as bonds and treasury bills – looked right for her, but with many investments requiring a minimum investment of between $20,000 to $200,000 and a six month lock up period for the cash, they weren’t really feasible.
 
“I quickly said thank you but no thank you to that opportunity, but I knew that it was an asset class that absolutely matched my risk profile and I knew I wanted access to that,” Rosenberg says.
 
Hence Blossom was born.
 
Rosenberg describes Blossom as a savings app which invests in fixed income to target a 3% annual return, higher than the near-zero returns offered by most bank accounts but without the volatility of equity markets.
 
“We're democratizing the fixed income market because we don't think you should have to choose between targeting higher returns and quick and easy access to your savings,” she says.
 
The app-based savings vehicle provides access to the Blossom Fund, a fixed interest fund run for Blossom by an external fund manager Fort Lake Asset Management.
 
Investors can start with $1 and there are no sign up or withdrawal fees. Withdrawals from the fund before 4pm are paid that same day, while those made afterwards are paid the following day.
 
Building trust with customers
 
Blossom accepts fund contributions via BPAY.
 
“We found that allowing BPAY payments to Blossom is just super easy and convenient and mostly familiar to customers who are used to paying their everyday electricity or utility bills with BPAY to begin with,” Rosenberg said.
 
“So as a new start-up, I also know that we're absolutely benefiting from the BPAY brand equity because Australians know BPAY. They trust BPAY. So I think what's happening is that trust is rubbing off onto Blossom as well, which is something we're grateful for.”
 
The fixed income app is the latest investment app do draw on BPAY's functionality to help move investors’ funds.

BPAY Group's Chief Customer Officer, Keith Brown, says while BPAY is often thought of as primarily a bill paying service, its attributes are also ideal for making investment contributions, such as to superannuation.
 
The biller code and unique customer reference number issued by BPAY provide customers with confirmation that their funds are going to right place.
 
“If you're paying to a BSB and account number, you don't do any validation to who you're paying, so you're not sure the money's going to the right place, which can be a concern if you're putting it into an investment for the first time,” Brown says.
 
More financial institutions are tapping into the convenience and security of allowing their customers to carry out financial transactions via BPAY. UBank allows customers to deposit money into their savings accounts via BPAY and managed fund Australian Ethical allows BPAY contributions, with each of its different funds having a unique biller code.
 
Set and forget contributions
 
BPAY also allows investors to set up and schedule regular payments if they have fixed weekly or monthly savings targets, and gives them more control than with a direct debit payment.
 
The Blossom app also has built in savings goals, with customers able to set a target and then watch their funds grow.
 
Customers are also using BPAY to set up automated recurring payments into the fund.

“It’s a fantastic savings tool because you can create the payment once and then you don't need to think about it again,” Rosenberg says.
 
“What we've seen now is that we have a lot of customers that are depositing $1, $5, $25 or sometimes even $100 a day through BPAY and then they're also able to set up weekly payments and fortnightly payments through BPAY as well.”
 
Thirteen weeks after launch, Blossom has 2500 customers with a total of $10 million under management.
 
It plans to also offer other investment products, with higher yields (and correspondingly higher risk).
 
The fund charges 0.5% to pay its responsible entity (the legal entity which holds investors’ funds), 0.5% to pay the fund manager and 0.5% to pay itself – but unusually, it only charges those fees after investors have earned their 3%.

Published by BPAY Pty Ltd (ABN 69 079 137 518) email: marketing@bpay.com.au. The BPAY Scheme is managed by BPAY Pty Limited.  When you use BPAY payment products, the BPAY Scheme is paid fees relating to processing costs and BPAY Scheme membership.  Contact your financial institution to see if it offers BPAY payment products and to get the Product Disclosure Statement.  Any financial product advice provided by BPAY Pty Limited in relation to BPAY payment products is general advice only and has been prepared without taking into account your objectives, financial situation or needs.  Before acting on such advice, you should review the Product Disclosure. 
 

Subscribe to the newsletter

Stay up-to-date about the changes in the dynamic payments industry, both in Australia and overseas.

Success! Thank you for subscribing.