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Afterpay, the $29 billion Aussie startup

Agence France-Presse

<div class="embed-wrap"><figure data-feedback="fb:likes,fb:comments"><img src="http://sa.kapamilya.com/absnews/abscbnnews/media/2021/tvpatrol/08/02/afterpay.jpg"/><figcaption>The Afterpay app is seen on the screen of a mobile phone in a picture illustration taken August 2, 2021. <em>Loren Elliott, Reuters/Illustration</em></figcaption></figure></div><p>SYDNEY, Australia - Australian fintech Afterpay is being bought out by US digital payment platform Square -- less than seven years after launching as a &quot;buy now, pay later&quot; start-up.</p><p>Twitter boss Jack Dorsey&#x27;s company is set to pay US$29 billion for the firm, which would reportedly be the biggest such deal ever seen in Australia.</p><div><strong>What is Afterpay?</strong></div><p>Afterpay operates a &quot;buy now, pay later&quot; app that allows users to pay off smaller purchases in regular instalments.</p><p>Unlike a credit card, users are not charged interest or a joining fee and spending limits are kept low.</p><p>But those who fail to meet their scheduled payments are hit with late fees -- for Australian users up to 25 percent of the purchase price, with a cap of Aus$68 per order.</p><p>The company makes most of its money by charging retailers for transaction costs.</p><p>Stores using Afterpay lose around four percent of the transaction&#x27;s value, but get the rest of the cash upfront and are not exposed to the risk of non-payment.</p><div><strong>Who is behind the company?</strong></div><p>Afterpay was co-founded in 2014 by Australians Anthony Eisen and Nick Molnar.</p><p>Molnar, 31, was a young entrepreneur who sold jewellery online before building Afterpay in his Sydney home.</p><p>He joined forces with his neighbour Eisen, who had already enjoyed a long career in finance and investment, to appeal to millennials embracing a cashless lifestyle.</p><p>The pair were billionaires even before the deal with Square, which is expected to send their fortunes skyrocketing. </p><div><strong>How popular is the app?</strong></div><p>As well as Australia, Afterpay is now available in the United States, Canada, the United Kingdom, France and Italy. </p><p>The app now boasts more than 16 million customers worldwide and works with almost 100,000 retailers.</p><p>Along with other &quot;buy now, pay later&quot; platforms, it has been credited with transforming the way young people spend online.</p><div><strong>What&#x27;s the catch?</strong></div><p>Some critics have raised concerns that Afterpay and similar apps may tempt people to spend money they do not have.</p><p>The &quot;buy now, pay later&quot; industry is largely unregulated in most countries, prompting calls for regulators to step in to protect consumers.</p><p>In March this year, Afterpay was among eight companies operating in Australia who created and signed a voluntary industry code of conduct.</p><p>It also agreed to pay almost US$1 million after being accused by Californian regulators of operating a lending business without a licence.</p><div><strong>Why is Square buying Afterpay?</strong></div><p>Square already operates a mobile payment platform, called Cash App, which has 70 million users per year.</p><p>It plans to integrate Afterpay&#x27;s services into its existing offerings, which also include Seller, saying it taps into a younger generation who are moving away from traditional credit.</p><p>Both companies say the merger and acquisition will help them to expand, by reaching new customers and retailers.</p><p>The deal is expected to close in early 2022.</p><ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/business/08/02/21/twitters-dorsey-leads-29-b-buyout-of-lending-pioneer-afterpay">Twitter&#x27;s Dorsey leads $29-B buyout of lending pioneer Afterpay</a></li>	<li><a href="https://news.abs-cbn.com/business/07/23/21/upbeat-quarterly-update-lifts-twitter-shares">Upbeat quarterly update lifts Twitter shares</a></li></ul><div><strong>RELATED VIDEO:</strong></div><figure class="op-interactive"><iframe allow="autoplay; fullscreen" frameBorder="0" height="100%" id="ivsplayer01" scrolling="no" src="https://player.ivideosmart.com/ivsplayer/v4/dist/html/iframe-src.html?iframeid=ivsplayer01&amp;key=e8c22c015ca9eafa76f1e3edfa03c603&amp;spid=3001339&amp;vid=1678927" width="100%"></iframe></figure><div class="iwantbar">Watch more in <a href="//www.iwantv.com.ph/">iWantv</a> or <a href="//tfc.tv/">TFC.tv</a></div>

<p>Australian fintech Afterpay is being bought out by US digital payment platform Square -- less than seven years after launching as a "buy now, pay later" start-up.</p>

Australian fintech Afterpay is being bought out by US digital payment platform Square -- less than seven years after launching as a "buy now, pay later" start-up.