Afterpay ramps up for the holidays with cross-border POS credit
The cross-border e-commerce market is set to pass the $1 trillion mark in 2020, providing a huge addressable market for Afterpay's buy now, pay later expansion.
Afterpay will immediately support merchant BNPL e-commerce to current markets British, Canadian, Australian New Zealand, in time for holiday shopping. In 2021 Afterpay will add U.S. consumers. The company also hopes to respond to the coronavirus-influenced move to online shopping.
“Cross-border trade allows retailers to open their storefronts to the world — delivering new customers, higher conversion and ultimately more merchant sales, without additional set-up costs or fees,” Nick Molnar, co-founder and CEO of Afterpay North America, said in a press release.
Afterpay referenced the CRO agency blog Invesp, that claimed the global cross-border e-commerce B2C sales market is expected to reach $994 billion in 2020, up 20% from $826 billion in 2019, with over 943 million cross-border shoppers.Invesp also reported that 54% of U.S. shoppers reported making a purchase from a foreign website in the past. Top reasons consumers shop at foreign websites include cheaper prices (49%), ability to obtain brands that aren’t available in the U.S. (43%) and unique products that aren’t found in the U.S.(35%).
Afterpay has been on an aggressive global market expansion to take on rivals Klarna, PayPal, Splitit and others as the BNPL service finds a larger number of ready buyers, particularly among Gen Z and millennials.
One advantage of Afterpay’s signature product is that it helps consumers shop by splitting a purchase into four convenient payments at no cost, unlike traditional BNPL loans by companies such as Affirm that take months to pay off and sometimes include fees or interest. As a result of this convenience, 89% of Afterpay's U.S. customers pay for their installments with a debit card.
It’s been so popular that PayPal introduced its own “Pay in 4” solution to take on Afterpay in the U.S. and followed the company witha U.K. launch in October after seeing Afterpay gain one million British active users in less than a year of operations.
Afterpay has been growing rapidly since entering the U.S. market in 2018 and the U.K. in the summer of 2019. In Europe, Afterpay operates under the Clearpay brand, which was part of a 2018 acquisition of ClearPay Finance Ltd. In August, Afterpay acquired Pagantis to challenge Klarna in Southern Europe. In its first two markets of Australia and New Zealand, Afterpay has more than three million active users.
As of Sept. 30, 2020, Afterpay is offered by nearly 64,000 of retailers and is used by more than 11.2 million active customers globally.