Afterpay is an Australian financial technology company based in Sydney. Nick Molnar and Anthony Eisen co-founded Afterpay in 2015, operating on a “buy now, pay later” model.
Afterpay is functional in Australia, New Zealand, the United States and the United Kingdom, where it is known as ‘Clearpay’. Afterpay was valued at over $1.1 billion in 2020, as the company’s model has gained the attention of a wide consensus.
This article walks you through the working of Afterpay and how you can use it.
Afterpay allows users to pay for their purchase in four bi-weekly instalments instead of a one-time payment. As retailer partnership has escalated over the past three years, payment methods have become more brand-specific.
This structure is an alternative to credit cards, Afterpay doesn’t charge users a dime if the payments are regular. A late fee is added after every missed payment which is capped at 25% of the original price.
How does Afterpay work?
Afterpay has a Shop Directory where customers can find the brand of their choice. Upon winding up with your cart, choose Afterpay as a payment method at checkout.
First-time users need to register for an Afterpay account, On returning you can use login to this account to complete the purchase.
An important distinction here is that the retailers are the ones offering instalment plans. As mentioned before, these are due every two weeks.
Should you consider installing it?
Afterpay seems highly attractive to the millennial eye which averses any kind of debt. Making payments in instalments and without fail helps users keep their expenses more flexible.
It helps retailers sell more volumes of products. Afterpay houses a risk management department which screens the users for approval. Having sufficient funds, time the user has used Afterpay for, and the number of open orders all come into play when placing an order.
An overdue instalment results in a USD $8 fine, which then compounds every week until the 25% cap limit is reached.
If the “buy now, pay later” option suits a customer’s needs, and helps their expense management become a bit lighter and sharper, the app should be a good fit.