Buy Now Pay Later

Financial Crisis Spurs New Way To Pay For A New Generation

Afterpay - Black Swan

With an idea born from the ashes of the global financial meltdown of 2008, the founders of “buy now, pay later” success story Afterpay understood then that a “…younger generation would be more apt to buy things they wanted and needed if they could use their own money and pay over time — in a way that didn’t incur revolving debt, interest or fees,” as Afterpay U.S. CTO Akash Garg recently told PYMNTS. Read his full comments in Black Swan from

The following is an excerpt from Black Swan, contributed by Afterpay U.S. CTO Akash Garg.

Financial Crisis Spurs New Way to Pay for a New Generation

Afterpay was born out of the fallout from the world’s last financial crisis. Our founders, Nick Molnar and Anthony Eisen, understood that younger consumers who had experienced the impact of the 2008 financial crisis firsthand were very wary of credit products and loans. In fact, many of their peers and colleagues were very budget-conscious and preferred debit cards. Nick and Anthony reasoned that the younger generation would be more apt to buy things they wanted and needed if they could use their own money and pay over time — in a way that didn’t incur revolving debt, interest or fees. And if the payment solution drove more buyers, especially valuable millennials and Gen Z buyers, retailers would be willing to pay for it.

The timing of the Afterpay idea coincided with another important economic shift. In the last decade, millennials and Gen Zers replaced baby boomers and Gen Xers as the generation with the most disposable income. This year, millennials will have the highest spending power, with almost $15 trillion worldwide. By 2025, U.S. millennials’ income will represent almost half of all salary earned, and they will spend $600 billion annually in the American market. And Gen Zers, ages 16-22, are right behind them as they enter the job market and the prime of their earning power.

With this type of spending power, retailers have responded by giving millennials and Gen Zers the options to spend in the ways they prefer — this means mobile shopping, social shopping and the ability to use their own money and pay over time. It is for these reasons that we see “buy now, pay later” (BNPL) solutions being so rapidly adopted around the world. In fact, according to Worldpay’s FIS 2020 Global Payments Report, BNPL solutions are poised to grow by 28 percent in major markets around the world.*

Our view, and a key learning from the past economic downturn, is that young shoppers are increasingly wary of credit and loans with interest, fees and revolving debt. With the new method, people are empowered to use their own money in a responsible and safe way.  Financial wellness and budgeting are, and will continue to be, the future of payments.

Read more insights and tips in Black Swan from PYMNTS.



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