Afterpay: Flexible payments to empower consumers and brands alike
When a company can bring flexibility to another business, it can be a recipe for success. And a win-win for both parties.
Afterpay, a Bold partner, has established a sterling reputation among its merchants for layering a flexible payment structure for shoppers, known in the industry as Buy-Now-Pay-Later (BNPL).
How does BNPL work? When a consumer visits a retailer that has partnered with a BNPL service such as Afterpay, they have the option at checkout to divide the cost of their purchase into four interest-free installment payments. As a Lightspeed report noted, “Online shoppers are coming to expect an option to buy now and pay later everywhere they shop online.”
Based in Australia, Afterpay is offered by nearly 100,000 of the world’s favorite retailers (American Eagle, Bed Bath & Beyond, Ray-Ban, etc) and has nearly 20 million customers in North America alone.
Giving customers alternative payment options can endear shoppers to brands. “Afterpay is a clear win for merchants, as they can offer their customers payment flexibility without requiring them to enter into a traditional loan or pay interest,” says Sarah Clansky, Director of Channel Partnerships at Afterpay. “Our merchant partners receive the full amount of each purchase upfront, and we take on the full risk of repayment. For brands and retailers, this leads to many business benefits such as increased conversion rates and sales, new customers, lower return rates, and higher average order values and basket size.”
Afterpay has no interest. There are also no fees if payment installments are paid on time*.
Driving growth for brands is at the heart of what Afterpay does. An Accenture report found that merchants using Afterpay gained $4.5 billion in net benefits in 2021, including almost $1.2 billion in net benefits for SMBs.
Afterpay is competing in a surging space. The global BNPL market size is expected to reach $20.40 billion by 2028, registering a CAGR of 22.4% from 2021 to 2028.
Going beyond a simple partnership
What merchants also appreciate about Afterpay, notes Clansky, is how a BNPL provider can be more than a payments provider but also a marketing partner. “Many customers will start their shopping journey on our Shop Directory, and oftentimes use it as a place to discover new brands and products,” she says.
Due to how the pandemic has accelerated the growth of ecommerce, consumers have now become used to the ease and flexibility of online shopping, forcing retailers to bring online convenience to the in-store experience, Clansky adds.
She goes on to speak on Afterpay’s omnichannel model, “Afterpay has helped brands overcome this challenge by allowing them to offer the BNPL service both online and in-store. Launching Afterpay in stores is a light lift for retailers, and provides them with a safe, contactless payment solution to offer to their customers.”
Looking to take advantage of innovative technology, Afterpay recently teamed with Westfield shopping centers on an augmented reality (AR)-activated scavenger hunt that offers QR codes for shoppers to scan and unlock deals and promotions at Afterpay-backed retailers.
And in 2021, they also unveiled two new products for merchants: Afterpay iQ is a customer-centric analytics tool to help brands evaluate marketing performance, omnichannel shopping volumes, and demographic summaries down to the store level; and Afterpay Ads introduces a new suite of advertising products to “help brands reach, acquire and activate high intent, loyal shoppers across the Afterpay ecosystem,” as the release writes.
What Afterpay provides to merchants and, through a behind-the-screens assist, to shoppers can be a teachable moment to other business leaders: make flexibility a priority, help your brand partners market to consumers, and adopt next-gen technology to continue to develop product lines that will retain core customers and open the door to new revenue.
*Late fees may apply. Eligibility criteria apply. See www.afterpay.com for more details. Loans to California residents made or arranged pursuant to a California Finance Lenders Law license.