Afterpay Launches BNPL Subscription in the US
Afterpay Expands into Subscription Payments
Afterpay, a leading “buy now, pay later” (BNPL) provider, revealed on Wednesday its entry into the $1.5 trillion global subscription payments sector.
The company will now provide U.S. customers with installment payment options for recurring subscriptions, encompassing services like gym memberships, streaming entertainment, and various online platforms.
Launch Details and Merchant Partnerships
The rollout of this service is scheduled to commence in both the United States and Australia in early 2022.
Customers who adhere to timely payments will not incur any fees. Initial merchant partners include prominent brands such as IPSY, BoxyCharm, Savage X Fenty, and Fabletics.
Future plans involve extending the feature to brick-and-mortar stores and additional geographic regions, including Canada, New Zealand, the United Kingdom, and Europe.
Expanding Payment Flexibility
Beyond subscription installments, Afterpay is also introducing support for preordered merchandise.
This allows customers to settle payments in four installments, initiated upon shipment of the item. Furthermore, a forthcoming feature will enable merchants to accept deposits for customized products.
Strategic Benefits for Consumers and Merchants
“Providing customers with the ability to pay for subscriptions using Afterpay delivers increased financial flexibility for potentially substantial monthly expenses,” stated Zahir Khoja, General Manager of North America for Afterpay.
“It also empowers our merchant partners to attract a broader customer base through a more convenient payment experience.”
Competitive Landscape and Recent Developments
Klarna, a key competitor in the BNPL market, also recently announced the availability of its “Pay Now” option for U.S. customers this week.
In August, Square announced its acquisition of Afterpay in an all-stock transaction valued at $29 billion.
Afterpay has been actively launching new features, including Afterpay Ads – a suite of advertising tools – and Afterpay IQ, a merchant analytics platform, both introduced in August.
Growth and Market Position
As of June 30th, Afterpay collaborates with 100,000 retailers and boasts approximately 10.5 million active customers in North America, a significant increase from 5.6 million the previous year.
North America represents the company’s largest market in terms of sales volume, experiencing a 145% year-over-year growth.
Sales increased from $4 billion in fiscal year 2020 to $9.8 billion in fiscal year 2021, according to company reports.