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Afterpay
Afterpay Limited (abbreviated as Afterpay) is an Australian technology company and a buy now, pay later (BNPL) lender. Founded in 2014 by Nick Molnar and Anthony Eisen, it is now owned by Block, Inc. As of 2023, Afterpay serves 24 million users, processes US$27.3 billion in annual payments, and ranks among the three most-used BNPL services globally.
Afterpay offers unsecured installment loans allowing shoppers to make in-store or online purchases, and then repay with a fortnightly frequency. It does not charge fees or interest to the consumers, unless they miss scheduled repayments, and does not check or affect the credit scores. The company charges merchants for offering its service, requiring that the charge is not passed on to shoppers. As of 2024, Afterpay operates as a subsidiary of Block, Inc., following an acquisition in 2021, and maintains presence in the U.S., Australia, Canada, France, Italy, New Zealand, Spain and the U.K.
In April 2014, Molnar, a Sydney-based jewelry salesman at the time, partnered with a product manager and an engineering manager in Melbourne to design a financial product he had conceived. The concept targeted online retailers focused on sales growth and shoppers looking for a way to receive goods upfront while paying later. The resulting design offered two interest-free options for consumers, ensuring the product remained outside Australia’s credit regulations. The first, "Pay After Delivery", allowed users to wait 30 days before making a payment, similar to using a credit card. The second, "Pay Over Time", let users divide their bill into four installments over a maximum of 60 days.
Later, in October 2014, Molnar and his neighbor, Eisen, formerly a chief investment officer at the Australian holding company Guinness Peat Group, co-founded Afterpay in their home in the suburb of Rose Bay, Sydney. They pursued the repayment option involving four interest-free installments. As the company grew, Molnar began encouraging consumers to contact their favorite retailers and request that they offer Afterpay, resulting in an effective social media campaign.
On 4 May 2016, the company listed on the Australian Securities Exchange with an A$25 million IPO.[note a] According to the Sydney Morning Herald in August 2016, Afterpay was being used at more than 300 retailers and had signed up more than 100,000 shoppers, financing $20 million worth of purchases in the quarter ending June 2016. Afterpay generated income from charging retail merchants, not customers, and Molnar claimed that "many customers" paid back money early. At that time, the Consumer Action Law Centre, an Australian consumer advocacy organization, cautioned that although shoppers were not paying interest to the company, they might end up paying interest anyway.
In March 2017, Molnar stated that Afterpay had 2600 retail merchants on its platform and that the company was growing its presence into the physical stores of its retail partners. In October 2017, he said Afterpay had grown to serve more than one million customers and over 7000 retailers, adding "only 20 percent" of the company's revenue came from late fees, and "about 80 percent" came from retailers. Afterpay reportedly managed to avoid being subject to Australia's national credit code, because the lender didn't charge interest and offered short-term credit to be repaid in less than 62 days.
In January 2018, American venture capital fund Matrix Partners announced its intention to invest A$19.4 million in Afterpay to support its entry into the U.S. retail market. Afterpay was launched in the U.S. in mid-May 2018 with retailers such as Anthropologie, Free People, and Urban Outfitters. In August 2018, Afterpay acquired 90 percent of the equity in "Clearpay", a U.K. based BNPL service, for a total consideration of one million Afterpay shares.
With reported underlying sales of A$4.7 billion in the 11 months to May 2019, Afterpay raised A$317.2 million in fresh capital through a share issue in June 2019, in part to help fund its international growth. Two months later, the company revealed that it had over two million active users and 6,500 merchants in the U.S. and announced a strategic partnership with Visa Inc. In its 2019 financial year update, the company announced that its growth in the U.K. was faster than that of the U.S., with more than 200,000 U.K. customers joining in the first 15 weeks. This year also saw former World Bank Chief Economist Larry Summers join Afterpay to advise it on its U.S. expansion.
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Afterpay
Afterpay Limited (abbreviated as Afterpay) is an Australian technology company and a buy now, pay later (BNPL) lender. Founded in 2014 by Nick Molnar and Anthony Eisen, it is now owned by Block, Inc. As of 2023, Afterpay serves 24 million users, processes US$27.3 billion in annual payments, and ranks among the three most-used BNPL services globally.
Afterpay offers unsecured installment loans allowing shoppers to make in-store or online purchases, and then repay with a fortnightly frequency. It does not charge fees or interest to the consumers, unless they miss scheduled repayments, and does not check or affect the credit scores. The company charges merchants for offering its service, requiring that the charge is not passed on to shoppers. As of 2024, Afterpay operates as a subsidiary of Block, Inc., following an acquisition in 2021, and maintains presence in the U.S., Australia, Canada, France, Italy, New Zealand, Spain and the U.K.
In April 2014, Molnar, a Sydney-based jewelry salesman at the time, partnered with a product manager and an engineering manager in Melbourne to design a financial product he had conceived. The concept targeted online retailers focused on sales growth and shoppers looking for a way to receive goods upfront while paying later. The resulting design offered two interest-free options for consumers, ensuring the product remained outside Australia’s credit regulations. The first, "Pay After Delivery", allowed users to wait 30 days before making a payment, similar to using a credit card. The second, "Pay Over Time", let users divide their bill into four installments over a maximum of 60 days.
Later, in October 2014, Molnar and his neighbor, Eisen, formerly a chief investment officer at the Australian holding company Guinness Peat Group, co-founded Afterpay in their home in the suburb of Rose Bay, Sydney. They pursued the repayment option involving four interest-free installments. As the company grew, Molnar began encouraging consumers to contact their favorite retailers and request that they offer Afterpay, resulting in an effective social media campaign.
On 4 May 2016, the company listed on the Australian Securities Exchange with an A$25 million IPO.[note a] According to the Sydney Morning Herald in August 2016, Afterpay was being used at more than 300 retailers and had signed up more than 100,000 shoppers, financing $20 million worth of purchases in the quarter ending June 2016. Afterpay generated income from charging retail merchants, not customers, and Molnar claimed that "many customers" paid back money early. At that time, the Consumer Action Law Centre, an Australian consumer advocacy organization, cautioned that although shoppers were not paying interest to the company, they might end up paying interest anyway.
In March 2017, Molnar stated that Afterpay had 2600 retail merchants on its platform and that the company was growing its presence into the physical stores of its retail partners. In October 2017, he said Afterpay had grown to serve more than one million customers and over 7000 retailers, adding "only 20 percent" of the company's revenue came from late fees, and "about 80 percent" came from retailers. Afterpay reportedly managed to avoid being subject to Australia's national credit code, because the lender didn't charge interest and offered short-term credit to be repaid in less than 62 days.
In January 2018, American venture capital fund Matrix Partners announced its intention to invest A$19.4 million in Afterpay to support its entry into the U.S. retail market. Afterpay was launched in the U.S. in mid-May 2018 with retailers such as Anthropologie, Free People, and Urban Outfitters. In August 2018, Afterpay acquired 90 percent of the equity in "Clearpay", a U.K. based BNPL service, for a total consideration of one million Afterpay shares.
With reported underlying sales of A$4.7 billion in the 11 months to May 2019, Afterpay raised A$317.2 million in fresh capital through a share issue in June 2019, in part to help fund its international growth. Two months later, the company revealed that it had over two million active users and 6,500 merchants in the U.S. and announced a strategic partnership with Visa Inc. In its 2019 financial year update, the company announced that its growth in the U.K. was faster than that of the U.S., with more than 200,000 U.K. customers joining in the first 15 weeks. This year also saw former World Bank Chief Economist Larry Summers join Afterpay to advise it on its U.S. expansion.