Known for its innovation in the ‘buy now, pay later’ space, the Australia-based provider of the fast-growing alternative payment option is helping to disrupt a long-standing cartel-like domination held by major credit card companies over consumer lending. It’s empowering its users, allowing them the freedom to take greater control over their spending and finances. And now, with its announcement of the introduction of cross-border commerce functionality to its services, Afterpay is further enabling its merchant network, opening up their storefronts and offering to the company’s rapidly expanding legion of consumers around the world.
Rapid Growth and Adoption
Currently available in Australia, Canada, New Zealand, the United States, and the United Kingdom, where it’s known as Clearpay, Afterpay is helping to transform the payments industry, allowing consumers to receive products immediately and pay for their purchases over four interest-free installments. And, with more than 11.2 million active users shopping with nearly 64,000 retail brands to date, the popularity and adoption of the payment option among both merchants and consumers is evident and continues to upsurge. It’s representative of the expeditious growth of the company that began its operations just five years ago, and a reflection of the strength of the network it’s cultivated to this point. And, according to David Katz, Afterpay’s Chief Product Officer, the addition of cross-border functionality to its services reenforces the company’s proposition and the benefits available to its users.
“For both the merchant and consumer, it’s really all about increased opportunity,” he says. “Afterpay enables connections between buyers and sellers. And with the introduction of cross-border commerce to our services, we’re providing consumers with more storefronts to shop, and merchants with the chance to connect and engage with more shoppers. As a company, we thrive on bringing merchants and consumers together. The addition of cross-border commerce really helps us strengthen our offering and supports our continued growth.”
Addressing a Consumer Shift
The launch of cross-border commerce allows Afterpay merchants to open their ecommerce sites to consumers in Australia, Britain, Canada, and New Zealand, with plans to make the functionality available in the United States next year. With an estimated 21 percent increase in global cross-border ecommerce sales in 2020 compared to last year, the announcement of its offering couldn’t be more fortuitously timed. And given the current climate that’s been influenced so dramatically by the COVID-19 global pandemic, Katz suggests that the potential benefits to retailers could be game-changing.
“COVID-19 has altered just about every aspect of the lives of people all over the world,” he asserts. “Specific to the retail industry, its impacts have led to a shift in consumer behaviour and an acceleration of ecommerce use. It presents retailers with a massive opportunity, particularly small and medium size businesses that are without a global presence, to open up their virtual storefronts to Afterpay’s engaged and enthusiastic shoppers around the world and capitalize on a trend in consumer behaviour that we believe will be long-lasting.”
Ecommerce Tipping Point?
Afterpay first introduced cross-border commerce capabilities in Australia and New Zealand back in March 2019. And, according to the company, it helped deliver an astounding 576 percent growth in year-over-year sales for its merchant partners in the countries. The company also says that as a result of the introduction of cross-border commerce, the number of merchants in Australia and New Zealand now selling outside of their borders has grown by ten times. And when combining these impressive results with numbers that emerged in a recent report developed by fintech research specialist, Kaleido Intelligence, which suggests that worldwide cross-border ecommerce spending will break the $1 trillion mark by 2022, representing fully 20 percent of global ecommerce activity, it seems as though Afterpay and its merchant partners may be poised to welcome and reap the rewards of a long-awaited global ecommerce tipping point.
“There’s no question that the opportunities for retailers related to ecommerce, particularly around selling to consumers outside of local markets, are significant,” says Katz. “Everyone at the company has put in a lot of dedicated work toward making sure that we can provide this additional channel for our merchants and consumers. And we’re really pleased to have been able to make the functionality available just in time for the busy holiday season.”
Continued Innovation and Enhancement
In addition, according to Katz, the company has also been working tirelessly in an effort to support the success of its in-store payment solution, which it recently rolled out in the United States. Also available in Australia and New Zealand since 2016, the solution allows Afterpay users to make payments at brick-and-mortar locations with a virtual, contactless Afterpay card that’s stored in their digital wallet. It’s a signal of the company’s intent to further disrupt the credit card industry and commitment to continue fulfilling its mandate to help its growing community of consumers realize “financial freedom, transparency and a fairer future” through a powerful omnichannel tool that also offers support for the success of its merchants on all channels. The company plans to soon introduce its in-store payment solution in each country across its network. And, although there has not yet been an announcement concerning the inclusion of cross-border functionality within its in-store solution, Katz promises that the company continues focus on improving its services to enhance the experiences and successes of its consumers and merchant partners.
“Afterpay set out to help transform a complacent payments industry and invigorate the consumer, empowering them financially and connecting them with their favourite retailers. We’ve enjoyed incredible success with our service and offering to this point. And we’re committed to continue enhancing what we provide our users ongoing, innovating to constantly upgrade and develop ways to improve the retail payment experience for both consumers and merchants. We’re combining this outlook with our aggressive plans for global expansion in an effort to extend our presence and services around the world and to continue growing the ever-expanding network of Afterpay users.”