How Afterpay Is Changing the Way Consumers Shop
Today, digital interest-free payment programs are prominent, most especially for Gen Z and millennials who are reluctant to use credit cards and Afterpay, a global payment instalment platform, is the talk of the show.
US internet users who have used digital interest-free payment programs (% of responders)
Growing Number of Users Worldwide
According to Ben Pressley, the executive vice president for sales, operations and strategy for Afterpay, the number of retailers currently using Afterpay’s service has grown considerably — it has more than 3 million active users in the US and almost three times that globally.
These numbers are telling. A graph above from CivicScience also shows how the number of digital interest-free payment program users increased from 24% to 30% last year.
More and more people are now choosing digital instalment plans and ditching credit cards.
How Consumers Use Afterpay
Pressley found that Gen Z and millennial’s are reluctant to use credit cards, preferring digital instalment plans to shop through their mobile phones without having to pay for interest.
Afterpay’s usage has drastically increased in 18 months. This means the millennials and Gen Z, who are active on social media, have spread it through word-of-mouth with their friends and followers. These younger generations look at the payment method, not just at the item they want to purchase.
“I want to buy Nike’s, and I know I want to do it with Afterpay, so I’m going to search on Afterpay for retailers that offer Nike’s.”
How Afterpay Helps Its Retail Partners
A shoe manufacturer, one of Afterpay’s retail partners, said their top-line sales skyrocketed over 100% since they implemented this payment platform.
Another retailer said Afterpay has accounted for about 40% of its share of checkout. On average, most retailers are seeing closer to 15%.
Afterpay has changed how retailers do business. After implementing this payment platform, they’ve noticed a vast improvement in their conversions.
ITS NOT JUST THE PAYING CONSUMER WHO HAS BENEFITED
For those that jumped on early to invest in Afterpay, they’ve been rewarded extremely well!
Even just over a year ago, at the start of 2019, if you had invested $1,000 you would have more than doubled your investment to $2,097 (+110%)! Given that interest rates have been sitting around 1.5% for the last few years, you can see why Afterpay investors are smiling.
Afterpay share price over last 3 years
Data IS THE TRUE VALUE UNDERNEATH
As with any of these companies, the data they hold is almost just as valuable as their share price. Gaining market share is crucial, as the more customers they hold (and look after), the richer the data asset.
We’re paying close attention to what these companies might offer next and who they align with as this with give clues to where the technology is likely to go.
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