Fintech Overview: Afterpay

Afterpay has taken Australia by a storm. A few years ago, Afterpay was only offered on a few online retailers. Now in 2018, there's rarely a site that doesn't offer it. A few thoughts on why I find it interesting. 

What is Afterpay? 

Afterpay_Logo_Colour_STACKED.jpg

Afterpay works like a loan, but with zero interest. When purchasing an item, you just select "Afterpay" as the payment option. Then you'll have eight weeks to pay the amount back in four instalments, at no extra cost. However, if there are penalties for late payment. 

Why its such an interesting idea?

I think Afterpay is an amazing business idea for 3 main reasons:

1. loan sizes a not overly large, hence requiring less capital outlay compared to other types of personal or home loans. This allows the startup to build a customer base without millions in required capital. 

2. It captures the millennial market. Although it may not appeal immediately to those with a credit card or the more financially savvy, it definitely appeals to those wanting an item but still is awaiting on the next pay check. 

3. Its fast and easy. Enough said. Who doesn't want that? 

The Founder

Nick Molnar is cofounder of Afterpay. Forbes wrote a pretty great summary of him: 

"Molnar has come a long way fast since selling watches and jewelry on eBay in Australia. Combining knowhow from his family's jewelry business with technology smarts and VC experience at M.H. Carnegie & Co., Molnar took a leap into fintech in 2014. He created Afterpay, an online company offering innovative payments option for customers to buy now and pay later through fortnightly interest free payments. It was a hit - attracting 375,000 customers and more than 2,100 retail merchants. Molar took his company public in April 2016, listing it on the Australian Stock Exchange at a market capitalization of $123 million."

Source: Forbes

 

FintechVictoria Gao