AfterPay is an Australian financial technology service provider that allows customers to pay securely and conveniently online with one click – and only when they have received the goods. This is not only particularly customer-friendly but also safe for the e-commerce provider, as AfterPay assumes the risk in the event of non-payment. In this article, you will learn about the other advantages of using AfterPay – for the customer but also for the e-commerce operator and what this means for the subscription economy.
How does purchasing with AfterPay work?
AfterPay claims that 40 percent of all consumers prefer to order their goods on the Internet by invoice. This offers customers the advantage of not having to have their credit card, CVC number or IBAN number ready at the time of ordering. Simply order conveniently on the go without having to whip out their card – in public, for example. Instead, the payment method is selected as the payment method, the goods arrive physically or digitally at the customer’s door and only then is the actual payment due. For larger sums, payment by instalments is even possible.
Another advantage of bill payments is that the user does not have to provide any sensitive data on the payment method. The company works with the data that was provided by the buyer anyway as part of the order. The service can also be handled completely via the smartphone or tablet. Starting with the selection of the payment option to the invoice by e-mail. In addition, if an AfterPay account is available, the buyer receives full transparency about his orders and payments via the customer portal “MyAfterPay”. On “MyAfterPay”, the customer can choose to complete the payment all at once or has the option to split the payment into several instalments.
AfterPay and Subscription Economy
Orders on account are not only relevant for physical orders in order to be able to examine the goods closely first. In the subscription economy, too, financial service providers like AfterPay enjoy maximum trust. They enable companies to adopt new business models such as subscriptions and recurring billing that capitalize on the growing trend among businesses and consumers to subscribe to services.
Four major advantages arise for subscription companies that offer AfterPay to their customers:
- Flexibility: Convenient and customized billing solution that adapts to ever-changing circumstances.
- Cash Flow: Financial solutions optimize cash flow by integrating anti-fraud, payment and collection services.
- Growth: Cross-border purchasing (with local support) is no problem.
- Safety: The safety requirements comply with current and constantly changing laws.
AfterPay becomes the globally relevant FinTech provider
After merging with Touchcorp in June 2017 to form the “Afterpay Touch Group“, the company became the global market leader in “buy now pay later” financial solutions. The Australian company now has more than 3.1 million users worldwide. In 2017 and 2018, the company was even named “FinTech Company of the Year“. Finally, in January 2018, the US venture capital fund Matrix Partners announced it would invest €12.2 million to support the company’s entry into the US retail market.
AfterPay is also getting merchants in Germany excited about its innovative payment method. A key unique selling point is the strengthening of the so-called post-checkout journey. Given that Germans are rather reluctant to provide payment data, the company seems to be tailor-made for the German market. In Germany, AfterPay is managed by Arvato Payments Solution GmbH. The portfolio of AfterPay shops in Germany is currently still expandable. Some well-known shops are, for example, Converse, Etsy, Takko and tophair.com.
Use AfterPay: From payment to customer loyalty
Payment with AfterPay is not only a great advantage for the customer, but indirectly also for the merchant. The possibility to order a service or a product immediately without paying for it creates immediate trust. The company states that with purchase on account, increases in the conversion rate of 20 percent can be achieved. Start-ups and new services in particular can only gain by offering a trustworthy payment method. At the same time, they assume the entire default risk through further integrated financial services. In addition, the partner receives valuable insights to better understand its existing customers and to win new customers.