Buy now, pay later (BNPL) firm Afterpay is launching a new monthly payment option that aims to give consumers greater payment flexibility and responsible spending options ahead of the holiday shopping season.
Shoppers choosing Afterpay’s monthly payment option can budget purchases over repayment periods of six or 12 months for purchases between $400 and $4,000, according to a press release Wednesday (Oct. 5).
For consumers, the new installment options include no late fees and no compounding interest, plus a cap on interest owed as well as transparency on the total owed at the time of purchase. Merchants offering Afterpay benefit by being able to offer more items across a wider range of categories and price tags, without accumulating additional transaction or integration fees.
Merchants can also benefit from the newly expanded Afterpay options by picking up new customers, increasing overall sales and seeing a boost in per-customer sale averages, per the release.
Afterpay’s new monthly payment solution will initially be introduced online, though the company has plans to make the service available for in-person purchases in 2023.
“Our new offering is a natural extension of the Afterpay experience — giving customers a new way to take more control and have more choice in the way they pay,” said Lee Hatton, head of Cash App Asia Pacific. “We look forward to supporting customers with yet another smart budgeting tool.”
Afterpay’s monthly payment option is currently available in the U.S. at Bellacor.com, EyeBuyDirect, FWRD and Your Mechanic, among others, with additional merchant partners coming soon. The company also plans to extend the offering to merchants outside the U.S. in 2023.
The BNPL company aims to give consumers an alternative to the high interest rates and compounding debt of credit cards. Over 98% of Afterpay transactions never incur a late fee and more than 90% of Afterpay transactions are paid with a debit card, according to the release.