The buy now, pay later (BNPL) company Afterpay has unveiled a subscription solution, allowing customers to pay for recurring purchases in installments.
The San Francisco company announced the service in a news release on Wednesday (Nov. 24), saying it would launch early next year. Merchants including IPSY, BoxyCharm, Savage X Fenty and Fabletics will be among the first to offer subscription payments.
“Subscription payments are already driving significant value for merchants and brands across the world — with the market predicted to be a $1.5 trillion industry by 2025, according to UBS,” the company said. “This new offering allows qualified merchant partners to potentially offer Afterpay for popular, everyday payment needs, including gym memberships, entertainment subscriptions, online services and more.”
In addition, Afterpay says it will accommodate the billing cadence for nearly any merchant to ensure an efficient checkout and autorenewal.
“By offering customers the option to pay for subscriptions with Afterpay, we’re not only giving consumers the flexibility to pay for more expensive monthly costs, but we’re also helping our merchant partners capture a wider consumer base through this convenient experience,” said Zahir Khoja, general manager of North America for Afterpay.
Subscriptions will be available on Afterpay across online platforms in the U.S. and Australia early next year. The company plans to extend this feature to in-store purchases and bring it to other regions, including Canada, New Zealand, the U.K. and Europe.
Meanwhile, Afterpay announced that beginning Wednesday (Nov. 24), merchants can give customers the chance to use Afterpay on pre-ordered items.
“This approach supports merchants with longer lead shipping times, while giving consumers the flexibility to pay for their pre-ordered item in four installments over time, once the item ships,” the company said. “In the near future, merchants will also have the flexibility to take deposits on custom items from Afterpay customers.”
These announcements come at the end of what has been a landmark year for BNPL in general and Afterpay specifically. In addition to being acquired by Square, the firm reported double-digit growth, with top lines soaring 78% year over year, and active customers and merchants ramping up by 63% and 77%, respectively.