Payment Methods

Afterpay Creates Incentives For Users To Pay On Time

Payments company Afterpay, which works in the buy now, pay later (BNPL) space, is rolling out a new feature called Pulse to help reward those who make payments on time, a press release says.

The release says the new program is meant to incentivize those who make payments on time and “choose to spend responsibly,” praising young people in the millennial and Gen-Z population who have made the choice to use debit cards and pay on time, “yet their responsible decision of spending their own money is not rewarded.”

Thus, Pulse will offer no payment up front on eligible purchases, interest-free installment payments from participating retailers like Sephora, Macy's and West Elm and more, more flexibility in payments for members, and access to exclusive discounts, promotions and new product launches from Afterpay, according to the release.

Pulse purports to give new benefits to the younger customers like millennials and Gen-Z, who the release calls “the most valuable.” Afterpay co-founder and chief executive Nick Molnar said the idea was to cater more to those who don't practice over-spending.

“Until today, loyalty programs across our industry have encouraged excessive spending, leaving no options for those shoppers who want to spend responsibly and avoid expensive fees and extended debt,” he said, according to the release. “We built Pulse to fulfill a need and offer a program in which both consumers and retailers benefit. This approach is fundamental to our mission and values as a company to encourage financial wellness and power an economy where everyone wins.”

Molnar told PYMNTS recently that the preference of younger people seemed to be trending toward digital or debit payments, and that the future would be geared towards meeting their needs of flexibility and control in spending.

Around 90 percent of Afterpay usage has been from customers using debit cards just this year so far. Also, SEC filings show a drop in users of credit cards as opposed to debit cards, the release notes, with Visa reporting less credit card use and U.S. credit card use dropping 21 percent year-over-year in May.

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NEW PYMNTS STUDY: ACCELERATING THE REAL-TIME PAYMENTS DEMAND CURVE – NOVEMBER 2020

About: Accelerating The Real-Time Payments Demand Curve:What Banks Need To Know About What Consumers Want And Need, PYMNTS  examines consumers’ understanding of real-time payments and the methods they use for different types of payments. The report explores consumers’ interest in real-time payments and their willingness to switch to financial institutions that offer such capabilities.

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