Afterpay is a service enabling retailers to offer a ‘buy now, receive now, pay later’ service that does not require end-customers to enter into a traditional loan or pay any upfront fees or interest to Afterpay. Afterpay has more than 4 million customers in the US, Australia and New Zealand and has now launched in the UK under the Clearpay brand and headed by Carl-Olav Scheible once the CEO of PayPal in the UK.
Clearpay charge retailers to offer customers interest-free instalment plans by splitting a purchase amount over 4 manageable fortnightly instalments. The service is free to customers who pay on time, with no interest and no contracts.
There has been a shift in payment behaviour amongst Millennial shoppers who have a preference towards debit cards and an aversion of credit. Clearpay is a solution to cater to this generational shift by offering customers an alternative to credit. Responsible spending has been built in – customers can’t use Clearpay for future purchases until they pay each instalment due. Approved spending limits are largely determined by customers’ repayment history. For those who have only recently joined, spending limits will generally be smaller.
Urban Outiftters and BooHoo first to sign with Clearpay
“Afterpay purchases see the lowest return rates of all our supported payment types in the US”
– David Hayne, Group Chief Digital Officer, Urban Outfitters
Boohoo have also confirmed plans to launch Clearpay across all its UK brands and websites, extending their Afterpay partnership in Australia, New Zealand and the US to Europe.
“Retailers across the US and Australia tell us that using this service drives down their returns, typically by around 20%, and attracts new customers online… This is about putting the customer first and, by virtue of that, facilitating mutually beneficial and higher value connections between retailers and their customers.
The Clearpay platform is unlike anything on offer in the UK, offering people greater flexibility to budget and pay for goods and services…By trusting consumers to repay free of charge, it turns accepted wisdom in financial services on its head.”
– Carl-Olav Scheible, UK CEO, Clearpay UK (Afterpay Touch Group)
