What is Afterpay?

Afterpay is a buy now, pay later (BNPL) application with millions of global users and over 10,000 merchant partners.

The app first gained popularity in New Zealand and Australia, especially amongst younger consumers seeking affordable financing for online purchases. Afterpay has gone on to become one of the foremost BNPL services in the world, expanding into global markets including the UK, Canada, and USA.

Suitable for online and in-store purchases, with Dazzly it is easy to offer Afterpay to your customers an alternative and trendy payment option.

How Does Afterpay Work?

Afterpay allows customers to make online purchases and pay for it later over four instalments.

Customers pay 25% of the sale price at the time of purchase, spreading the remaining cost and payments over six weeks. The app also lets consumers repay before the required six weeks, with the option to repay in later instalments if preferred.

Customers using Afterpay are not charged any interest, although late fees do apply if repayments are not made on time. Customers pay 25% of the purchase price every two weeks after the purchase date, with the repayment completed after six weeks.

Businesses offering Afterpay are paid immediately, so they don’t need to wait six weeks to receive money for purchases. Afterpay does charge businesses a fixed transaction fee and commission for each sale. The benefits of having access to the cash-flow from these sales is critical small businesses at any stage of growth but particularly in their earliest years.

Simple to use and offering flexible financing for customers, Afterpay is one of the leading BNPL services in the world. Afterpay seamlessly works with Dazzly, offering many benefits for both businesses and consumers.

What Businesses Does Afterpay Apply to?

Given the rising popularity of buy now, pay later apps, Afterpay is widely available for most online retail businesses. This includes major global brands and smaller domestic businesses, covering a wide range of retail categories.

While the platform does have some restricted products and services, such as alcohol and gambling, most goods can be sold using the app.

Furthermore, the app is available for domestic transactions only. Payments from the app must be the same as the merchant’s domestic currency.

Given its popularity with Millennials, the app is most widely used for fashion, health and beauty, and fitness products. That said, most merchants will find that Afterpay is suitable for their goods and services, making it a great option for most ecommerce businesses.

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The benefits of offering Afterpay as a payment option

Offering Afterpay increases ecommerce sales

The use of buy now, pay later apps like Afterpay is likely to increase conversions.

Many customers don’t make a purchase they would like due to a lack of money or flexible financing. With buy now pay later, customers can spread the cost of the purchase, so are more likely to be comfortable with completing the purchase today rather than deferring or ultimately not purchasing it at all.

Giving consumers the confidence that they can buy something now and pay for it later is a huge advantage for any online retailer. Some people are short on disposable income but still want to make a purchase, so services like Afterpay are a great solution.

This can be especially advantageous for larger purchases. While Afterpay does have a spend limit, it’s still high enough to give customers the confidence to treat themselves to pricier items than they might normally be able to.

Offering Afterpay helps attract new customers

Afterpay isn’t just appealing to those that have low cash in-hand (or in wallet). It is a preferable option for customers regardless of their immediate access to funds. Many customers with large amounts of savings take advantage and appreciate the financial astuteness of the buy now pay later process. By making payments on-time, customers are not subject to any fees or penalties – now that is making the most of your money!

To be clear, Afterpay doesn’t charge interest, meaning there are few downsides to spreading payments over four instalments, even if you can afford to pay it all at once.

So, by providing consumers with the buy now, pay later option, you are increasing the chances of attracting new customers that prefer this way of paying. Without it, you may still get some of those customers, but many will seek our alternative businesses that offer Afterpay in the first instance.

Offering Afterpay caters to younger demographics

Younger demographics like Millennials and Gen Z are especially fond of services like Afterpay. If Millennials and Gen Z are part of your demographic (or a potential new demographic) then offering Afterpay is a great method for attracting them and aligning your brand with the same things they value. In short, Afterpay is an effective method for generating sales, leads and customer lists if your business is interested in this market/demographic.

Younger customers have typically shielded away from traditional financing like credit cards, so BNPL apps provide a more appealing financing option that promotes greater financial inclusion to everyone.

Offering Afterpay means you get paid immediately

A great aspect of Afterpay and similar services is that you don’t need to wait to get paid for customer transactions. Afterpay immediately pays merchants after the transaction is completed, so they won’t have to wait the full six-week period to receive payment.

While Afterpay does charge some fees and commissions per sale, this is typically offset by the increased volume of sales the service provides.

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The Benefits of Using Afterpay for Customers

Consumer-Friendly Financing

Whether it’s a lack of cash flow, waiting for your next pay cheque, or wanting to avoid credit cards, not all customers have suitable financing options for online purchases.

The truth is, that in life, unexpected things happen and our best plans do not always stay on-track. Sometimes all you need is an extra hand and trust that gives you a short-term boost which you can later reciprocate and pay back. Afterpay is that boost, and unlike some traditional providers, they have structured their offering and processes to do their best to give you the benefit of the doubt.

Afterpay offers flexible financing, giving them the chance to receive their goods without needing to pay the entire cost upfront. This promotes financial wellness which Dazzly is proud to also support.

Add in the fact that Afterpay charges no interest, and it becomes clear why BNPL services are so appealing to your average customer.

Even consumers that have enough money to pay for the products appreciate this alternative form of payment. They get their products immediately and can spread the cost over manageable, interest free payments – it’s a win-win!

Flexible Payment Options

Afterpay offers flexible payment for your average consumer. They can split the cost of their purchase over four fixed payments or in two-week instalments. It’s easy to follow and most people pay it on time with no extra fees.

They can also choose to pay in fewer instalments if preferable. For example, they could pay the initial 25% on the day of purchase, then pay the remaining 75% in another payment. Whether it’s paying in two, three, or four instalments, Afterpay offers flexible financing that benefits many consumers.

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Why Your Website Should offer Afterpay as a Payment Option

Here’s why an online retailer should strongly consider Afterpay as a payment option on their website:

Afterpay builds trust

BNPL is very appealing to customers, so by offering it on your Ecommerce website you encourage them to have more trust in your brand. Afterpay is a recognisable brand and consumer-friendly payment option.

Afterpay offers a hassle-free way to shop on your website with a familiar payment method, making your customers more likely to purchase. After one purchase, you’ve already started to develop a relationship between you and the consumer.

Moreover, it could be the deciding factor for a customer that is unsure about making their purchase on your website! Afterpay could be the difference between an abandoned shopping cart and a successful sale.

Afterpay makes you remain competitive

If you aren’t offering Afterpay for customers, you’re only falling behind the competitors that do. No matter your niche, some of your competition will be offering BNPL payment options to customers.

Even if your competitors are not offering services like Afterpay right now, it’s only a matter of time until they do. The market for BNPL is simply too large for consumers to ignore, so don’t make the mistake of falling behind the curve!

As trust and familiarity increases with BNPL services over the coming years, the market is only going to increase. If you aren’t catering to consumer demands, your competition will!

Can you imagine your customer, upon finally deciding to purchase your goods, having to stop in their tracks to now consider their financing options? Do you think they would be happy, and likely to complete the purchase, if they had to call a third-party finance company they’ve never heard of, to create an account and then fill out an application form, to, at some stage, receive approval for the purchase and then come back to you? No, you can’t. Because its 2022 and you know your customers expect better, more convenient, less arduous payment options and you, as a product seller, deserve to get the sale every time that your customer wants to give you it.

Afterpay is an easy option to offer

While traditional point of sale systems can be complex, especially in your earliest years in business, let alone when integrating into your website. Afterpay couldn’t possibly be easier to enable/work with Dazzly. It only takes a few clicks to offer Afterpay on a website created with Dazzly!

Considering the minimal hassle to integrate Afterpay as a payment option, it makes sense to at least try this service on your website.

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Ecommerce Store

Sell your Products and receive payments to your bank account. Modern and mobile-responsive Ecommerce Store with click-and-collect ability. Stock control and product variations supported.

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Buy now, pay later (BNPL) has quickly become one of the most in-demand payment options for online shopping.

Offering a convenient way to pay for online purchases over affordable, interest-free instalments, it’s not surprising that BNPL market continues to grow here in America and throughout the globe.

Afterpay is a market leader in the BNPL market, finding initial success in New Zealand and Australia. It provides many benefits for both consumers and merchants, with few drawbacks, highlighting why BNPL has become a must-have feature for online retailers of every scope and size.

Here at Dazzly, we make it extremely easy to offer Afterpay on our websites, letting you take advantage of this powerful payment option.

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