Afterpay’s third-quarter results show that its buy now, pay later (BNPL) online payment method continues to attract consumers. Its number of U.S. customers surged to 4.4 million (a 283 percent increase from the same quarter last year).
Afterpay’s model allows customers to pay for items in interest-free installments.
The company highlighted the “stickiness and quality of the customer base,” with 90 percent of its gross merchandise volume (GMV) coming from repeat customers worldwide in the third quarter of its 2020 fiscal year. GMV is an online retailing term that represents the total sales dollar value for merchandise.
Based in Sydney, Australia, the company said it has “maintained a strong position through the COVID crisis.”
The idea for Afterpay was hatched in the wake of the Great Recession, the last economic crisis. As previously reported, its Founders Nick Molnar and Anthony Eisen recognized that there was a big market among younger consumers who were risk-averse. As budget-conscious consumers, they often preferred debit cards to credit cards.
Afterpay asserts that its deferred payment option helps boost sales for retailers. The consumer lending company emails customers an invoice and payments can then be made in four interest-free installments, due every two weeks, according to the company’s website.
In the U.S. market, the company highlighted that it had $2.4 billion in total sales through the third quarter, or July 1, 2019 through March 31, 2020. U.S. sales were $1 billion for the third quarter alone.
Afterpay said the “number of active merchant partners are up 271 percent with 9,100 U.S. merchants (48,400 globally).” It pointed to American Eagle, SHEIN, The Hut Group, Furla and Perricone MD as new retailers offering its payment service.