April 26, 2021
Afterpay, a leading buy now, pay later (“BNPL”) product, is taking advantage of the shift towards online spending as a result of the Covid-19 pandemic. Afterpay’s BNPL platform allows customers to stretch the purchase price of their item over time, into four interest-free installments. In just over two years, the company has amassed more than 8 million customers in the U.S and has grown over 200% from 2019-2020.
The BNPL market is growing quickly and BNPL products are seeing an explosive surge in demand from consumers. Bank of America projects the market for BNPL products to grow 10-15 times the size of what it currently is, and eventually process $650bn-$1tn in transactions. Afterpay is competing against a small group of BNPL providers, with Klarna, PayPal, and Affirm also operating in North America, but the big banks are closely monitoring the BNPL sector and are expected to introduce their own versions this year.
Afterpay differentiates itself by embracing discovery and personalization to become a destination for consumers, rather than simply a checkout option. Alex Fisher, VP of Retail at Afterpay stated, “our customers report that the top deciding factor in where they shop is whether Afterpay is offered.”
Author: Kyle Jacobson