Buy now and pay later giant’s next big move
Australian buy now, pay later giant Afterpay has accelerated its global growth by launching its first push into the European payments markets.
The Australian Stock Exchange listed company on Tuesday announced its European subsidiary Clearpay would go live across Spain, France and Italy.
Afterpay believes southern Europe will be its latest cash cow following a popular uptake in North America, as the region has a large population of millennials who are adopting the instalment payment alternative.
According to the Melbourne-based company, Southern Europe has an e-commerce market worth €150bn ($A170bn) across the three nations.
More than 75,000 retailers will be offered through Afterpay's European subsidiary.
The countries are also attractive to the major BNPL player due to the strong demand for beauty and fashion products by local consumers who are predominantly using debit cards to make transactions.
Clearpay only allows customers to make instalment payments through debit transactions and not credit cards.
Afterpay co-founder Nick Molnar said the push had also been influenced by the rapid acceleration in e-commerce, which in the past 12 months grew faster than it had in the last 10 years.
"By introducing Clearpay, we are giving Europeans a better way to access the things they want and need in their lives via a flexible payment service that allows shoppers to spend their own money and pay over time - instead of turning to expensive loans and credit cards which come with interest, fees and revolving debt," Mr Molnar said.
Afterpay brands itself as an alternative to credit card use by offering customers the ability to split up the cost of a product or service into four fortnightly payments.
The company's major competitor in Europe is Klarna, which has also entered the Australian market and is financially backed by the Commonwealth Bank.
Afterpay now has more than 13 million active users and, at its 2021 interim financial year results, posted an underlying sales amount of $10.1bn in Australian dollar terms.
European customers will be able to use the service for free, and Afterpay has gained regulatory approval for use in Portugal and Germany.
In 2020, Afterpay acquired Spanish payment company Pagantis, which has acted as its launch pad into Europe.
Listed Afterpay stock last traded at $108.33 per share.
Originally published as Buy now, pay later giant's next big move