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Buy-now, pay-later provider Afterpay inks deals with retailers including Amazon, Target

13 major companies now on the app represent almost half of US e-commerce volume

Afterpay, a buy-now, pay-later provider, has inked deals with 13 major retailers, including Target representing nearly half of all e-commerce purchases. Customers using the Afterpay app in any of those businesses can make payments on their purchases for up to six weeks. (Photo: Target)

As e-commerce boomed during the COVID-19 pandemic, more consumers than ever turned to digital payment options. With physical stores reopening, consumers are still looking for digital tools to make flexible payments as e-commerce continues to expand, with online sales up 39% in Q1 2021 year-over-year, according to Afterpay.

Afterpay (OTC: AFTPY), one of the leaders in the “buy-now, pay-later,” space, has inked deals with 13 major retailers to allow its customers to take advantage of delayed payment options when purchasing items.

“Over the past year, we all relied on online shopping for the things we needed during the pandemic. But, as we celebrate the physical reopening of stores, consumers still want the convenience and flexibility of buying with the click of a mouse as part of their ‘new normal,’” said Zahir Khoja, general manager of Afterpay North America. 

Amazon (NASDAQ: AMZN), CVS (NYSE: CVS), Dell (NYSE: DELL), Kroger (NYSE: KR), Macy’s (NYSE: M), Nike (NYSE: NIKE), Nordstrom (NYSE: JWN), Nordstrom Rack, Sephora, Target (NYSE: TGT), Victoria’s Secret, Walgreens (NASDAQ: WBA) and Yeti combined represent nearly half of all e-commerce volume in the country. Now, Afterpay app customers can use the app at any of these stores.

Founded in 2014, Afterpay allows consumers to buy and receive an item immediately with only a 25% upfront cost. The remainder of the purchase price is repaid, interest-free, over the next six weeks in four equal payments. Customers with late payments are not allowed to use the app for another purchase until the debt is settled, but Afterpay notes that this prevents customers from running up large debt as occurs with credit cards.

The average transaction using the Afterpay app is $155. There are no monthly fees or other charges to the consumer. Afterpay pays the merchant for the items upfront and then collects a small fee from the merchant for the service. Afterpay said it provides 31 million leads on average each month to its merchant customers from its Shop Directory, which is where most of its customers begin their shopping journey.

Buy-now, pay-later services have grown in popularity as consumers look to delay payments as they manage income uncertainties. Earlier this month, Softbank led a $639 million funding round into a competitor of Afterpay, Klarna, valuing the Swedish company at $45.6 billion.

“Consumers continue to reject interest- and fee-laden revolving credit and are moving toward debit while simultaneously seeking retail experiences that better meet their needs,” Sebastian Siemiatkowski, Klarna’s founder and CEO, said in a statement at the time.

Click for more Modern Shipper articles by Brian Straight.

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Brian Straight

Brian Straight leads FreightWaves' Modern Shipper brand as Managing Editor. A journalism graduate of the University of Rhode Island, he has covered everything from a presidential election, to professional sports and Little League baseball, and for more than 10 years has covered trucking and logistics. Before joining FreightWaves, he was previously responsible for the editorial quality and production of Fleet Owner magazine and Brian lives in Connecticut with his wife and two kids and spends his time coaching his son’s baseball team, golfing with his daughter, and pursuing his never-ending quest to become a professional bowler. You can reach him at [email protected].