Adding to the stereotypical ‘we want it, and we want it now’ attitude of today’s buyers, Afterpay is fuelling the fire of consumption. But can Afterpay benefit your online store and are there any risks involved? Here we outline all you need to know about Afterpay as a small business owner.
What is Afterpay?
Initially launched and used exclusively by online stores, Afterpay offers consumers an alternative to upfront payment. In a similar fashion to layby, Afterpay allows buyers to pay for their purchase over four, interest free, fortnightly installments. However, the difference lies within the feature of consumers being able to have their product before official purchase is made. While this is all a fabulous turn of events for customers, is Afterpay a wise choice for your online business?
Once a buyer purchases a product from your online store, they then select Afterpay at the checkout. From here they can either choose to pay their first installment or no installment at all. The order is then shipped, Afterpay settles the transaction with you and the customer makes full payment over time to Afterpay, i.e. the full amount of the purchase cost is paid directly to you upfront.
Okay, it’s a little confusing, so here’s an analogy.
Say you had three unicorns to sell at one billion dollars each. Local gal Suzy sees your unicorns for sale online and knows that this is an offer too good to miss. Suzy immediately adds one unicorn to her bag and checks out. At the checkout she chooses Afterpay and opts to not pay her first installment. You then deliver the unicorn to Suzy and Afterpay transfers you the full billion dollars immediately (minus handling fees). From there Suzy deals directly with Afterpay while she pays her unicorns off.
Some of The Perks
Afterpay provides a valuable service to buyers who are otherwise a little lousy with their money. In this way, Afterpay works as a budgeting tool for consumers. By breaking down the full cost price, i.e. a $100 purchase into two months of payments works out to be $12.50 per week, which seems far less daunting to a penny pincher. In this sense, consumers who were once less likely to fork out big bucks for your products, are now finding them more attainable. Afterpay also claims that their customers spend more money than other consumers and are more likely to return to your store over their lifetime which is a pretty big call.
How do I get Afterpay on my website?
The process actually appears quite simple. Either by using an Afterpay plugin or API installation, this is basically all there is to it.
How Much Will Afterpay Charge Me As A Merchant?
These figures range from 4-6% depending on how much your customer spends. And while this may seem like quite a lot, if you are gaining business from customers who otherwise might not have shopped with you, you’re winning.
Do you use Afterpay on your website? How have you found it so far? We’d love to know!