Afterpay is basically like online layaway except sellers get their entire payment right away and buyers don't have to wait until their items are paid off to enjoy them. Win-Win. The Austrailian tech company allows customers to pay for items in installments without fees or interest; meanwhile, retailers get paid in full.
I first heard of Afterpay from artists on Instagram that were promoting it as a new method of payment, but a large majority of online retailers currently offering it are fashion brands like Urban Outfitters and Anthropologie, and health and beauty stores. Afterpay processes more than 25% of all online fashion/beauty transactions.
Princess Polly’s home page got a refresh with “Buy Now, Pay Later.”
Lorna Jane featured a section when you land on their site, “Buy now. Sweat Now. Pay Later.”
Retailers will pay 30 cents per transaction, plus a 4-6% commission fee. The larger the transaction, the lower the percentage fee. This is relatively high compared to other payment methods. For example PayPal processing fees are 2.9% + 30 cents for each transaction and major credit cards are usually less than 3%.
It costs nothing to use Afterpay as a consumer. All you need is a credit or debit card, and you'll only pay fees if payments are made late.
It allows customers to follow through with a purchase that they may have abandoned before, possibly spending more than they normally would on higher ticket items (there is a $35 minimum) or bulk items. This may come in handy around the holidays.
“The service is appealing to retailers and brands as it helps to increase conversion rates and incremental sales by 20-30%." -Nick Molnar, Founder and CEO of Afterpay
The commission costs are relatively high, so you'll need to look at your ROI to decide if it makes sense for your business.
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