Afterpay is the most popular way for a customer to shop both online and offline, getting their goods while paying for them later. Repayments are broken up evenly into four payments and scheduled fortnightly. Consumers love it because there are no Afterpay fees or interest unless a payment is late.
Typically, Afterpay has a limit of $500 for accounts linked to a debit card and up to $1,500 if attached to a credit card. Payments are made automatically, with the first payment due two weeks after the purchase. Users can pay in advance if they wish. All purchases over $500 require 25% upfront at the time of sale.
The benefit of Afterpay for business is that they can use the service to offer their customers interest-free credit, but typically get paid in around 48 hours, while Afterpay assumes the risk.
Afterpay accepts Mastercard, Visa and all other major credits cards issued in Australia. Online, it is also designed to work seamlessly with WooCommerce, Shopify, Magneto and Neto.
Afterpay fees for merchants
Online merchants pay a flat fee of 30cents plus commission for each transaction made via Afterpay. Commissions range from 4 to 6 percent, depending on the value and volume of transactions. The more volume, the lower the percentage the commission will be.
Is Afterpay worthwhile?
Afterpay fees are higher than credit card transaction fees; however, the advantage of offering customers credit has proven to boost sales, and as such, likely outweighs the additional Afterpay costs.
As Afterpay increases in popularity, so does the demand for the service. Many consumers today are preferring to shop only with retailers who offer the Afterpay or similar option of buy now pay later.
Customers are also more likely to spend more money when shopping when using Afterpay.
Retailers should register for Afterpay and discover for themselves if it has a positive impact on sales for their store.