Commonwealth Bank of Australia (CBA) has entered the buy-now-pay-later (BNPL) market with the launch of its BNPL platform, dubbed StepPay.

The new offering will allow customers to split the payment into four fortnightly instalments for transactions higher than $71.1(A$100) with low credit limits up to $717.11 (A$1,000).

The lender stated that over 86,000 customers have already pre-registered for StepPay, which is linked to CBA bank account.

The service will only be available to eligible customers and StepPay will charge a fee of A$10 for every missed instalment repayment.

CBA noted that customers are approved for its BNPL offering based on specific eligibility and credit assessments.

CBA executive general manager Marcos Meneguzzi said: “We are excited to create the first BNPL from a major bank which can be used anywhere our cards are accepted. We know BNPL is a popular choice among customers but is hampered by its limited use and availability in only selected retailers and businesses. With StepPay, customers have freedom around where they’d like to shop, offering the same accessibility as our other CBA cards.”

The news comes shortly after Square signed a $29bn deal to acquire Australian BNPL fintech Afterpay.

Last month, Afterpay launched a banking app in Australia where it is said to be a leading player in the BNPL market.

Last week, National Australia Bank agreed to purchase the consumer business of Citigroup in a deal valued at $880m (A$1.2bn).