Afterpay – Buy Now Pay Later
Designed for people aged 18 and over, who are seeking an alternative to traditional forms of credit, Afterpay allows customers to make a purchase today, but pay for it over four equal fortnightly installments. In addition, the solution is completely free of charge for customers who pay on time.
Afterpay has stimulated incremental consumer demand via the provision of credit to a population who often has difficult access to credit. Online retailers pay Afterpay a merchant fee for each transaction (c. 4.2%, versus 1.5%-2.5% merchant fees typically paid to credit card processors). In return, retailers can expect a highly quantifiable uplift in sales. The company has benefitted from the growth of online shopping. They also could count on a shift away from credit cards among younger generations.
The buy-now-pay-later firm has created a win-win situation for customers and retailers alike. They indeed help customers spread out their payments without incurring any excess charges. They also contribute to retailers’ success by boosting their online traffic and sales.