Afterpay Customers Save Up to $459 Million in Fees by Not Using Credit Cards - Drives $8.2 Billion in Incremental Sales for Merchants in 2021

Rhea-AI Summary

New research by Accenture reveals that in 2021, Afterpay (ASX:APT) generated $4.5 billion in net benefits for merchants, with $8.2 billion in incremental sales tied to improved online shopping experiences. The report highlights that Afterpay's services helped customers save $459 million in credit card fees and interest, translating to $6 per order. Additionally, Afterpay contributed to the creation of approximately 70,000 jobs in the U.S. economy and is linked to increased customer engagement and repeat purchases.

Positive

• Generated $4.5 billion in net benefits for merchants in 2021.
• Drove $8.2 billion in incremental sales for retailers, enhancing online checkout conversion rates.
• Created $590 million in merchant cost savings, primarily from lower customer service costs.
• Consumers saved up to $459 million in credit card fees and interest, approximately $6 per order.
• Contributed to the support of 70,000 jobs within the U.S. economy.

Negative

• None.

SAN FRANCISCO, Oct. 5, 2021 /PRNewswire/ -- New research conducted by Accenture reveals that in 2021, Afterpay (ASX:APT), the leader in "Buy Now, Pay Later" payments, drove $4.5b in net benefits to merchants, including $8.2b in incremental sales for retailers and SMB merchants, as they forge their way through the pandemic in 2021.

"US Economic Impact of Buy Now, Pay Later" highlights the benefits Afterpay has had on the United States economy - including driving additional business for retailers and helping consumers avoid credit card interest and fees.

The $8.2b in incremental sales for retailers in 2021 is primarily attributed to Afterpay's impact on incremental sales through improved online checkout conversion rates, larger customer basket size, exposure to new customers, increased customer engagement and a rise in repeat purchases. Afterpay will create $590m in merchant cost savings in 2021, with over 80% of the savings coming from lower customer service and acquisition costs.  

The report also found that Afterpay's U.S. customers could save up to $459m in credit card fees and interest in 2021 by making purchases with Afterpay instead of a credit card, equivalent to $6 per order. Afterpay users are more than twice as likely to make repayments on time compared to credit card users.

A summary of the Accenture report's key highlights include:

• Merchants using Afterpay gain $4.5bn in net benefits in 2021, including almost $1.2bn in net benefits for SMBs
• This includes $8.2bn in new revenue in 2021
• The largest portion of new revenue is derived from larger basket sizes
• The average merchant was able to obtain almost 13% more new customers
• Afterpay created $590m in merchant cost savings in 2021, with almost 50% of the saving in lower customer service costs

• Consumers are estimated to save up to $459m in fees and interest by making purchases with Afterpay instead of credit cards, equivalent to $6 per order
• Afterpay fashion spending is equivalent to 6.5% of US fashion e-commerce
• Afterpay spending helped support 70,000 jobs in the American economy in 2021.

Accenture Managing Director, Andrew Charlton said: "After conducting this analysis of the economic benefits of Afterpay, it's clear why the service has exploded in popularity around the world. The platform delivers a rare "win, win"- in which consumers are offered a better and more economical way to pay for things they want and need. This in turn drives incredible value to merchants who acquire young, engaged consumers who become repeat shoppers -  ultimately making Afterpay an invaluable sales channel for these merchants."

Afterpay offers consumers a wide network of nearly 100,000 global retailers, which allow customers to receive items immediately and pay over time, without revolving debt or paying interest. Merchants benefit from the company's highly-engaged customer base, as the Afterpay Shop Directory generates an average of one million merchant referrals globally per day¹.

About Afterpay Limited

Afterpay Limited (ASX: APT) is transforming the way we pay by allowing customers to buy products immediately and pay for their purchases over four installments, always interest-free. The service is completely free for customers who pay on time - helping people spend responsibly without incurring interest or extended debt. As of June 30, 2021, Afterpay is offered by nearly 100,000 of the world's favorite retailers and nearly 20 million customers have signed up in North America alone².

Afterpay is currently available in Australia, Canada, New Zealand, the United States and the United Kingdom, France, Italy and Spain, where it is known as Clearpay. Afterpay is on a mission to power an economy in which everyone wins.

¹ Results announced in FY21
² Results announced in FY21

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SOURCE Afterpay

FAQ

What financial benefits did Afterpay provide to merchants in 2021?

In 2021, Afterpay delivered $4.5 billion in net benefits to merchants, including $8.2 billion in incremental sales.

How much did Afterpay customers save in credit card fees in 2021?

Afterpay customers saved up to $459 million in credit card fees and interest in 2021.

What impact did Afterpay have on jobs in the U.S. economy?

Afterpay spending supported approximately 70,000 jobs in the American economy in 2021.

What are the main reasons for Afterpay's increase in sales for retailers?

Afterpay's increase in sales for retailers is attributed to improved online checkout conversion rates, larger basket sizes, and increased customer engagement.

What is the significance of the Accenture report for Afterpay?

The Accenture report underscores Afterpay's economic impact, highlighting its ability to drive sales for merchants while providing savings for consumers.