Dive Brief:
- Continuing its U.S. expansion, Afterpay has extended its list of merchant partners, adding its installment payment services to Diane von Furstenberg, HanesBrands, Kendra Scott, Shop Premium Outlets and multiple other retail businesses, the company announced Wednesday.
- Buy now, pay later users aren’t just spending on beauty and fashion. In 2023, the top Afterpay categories for Gen Z and millennial users were arts, travel and entertainment, home and garden, hardware, health and beauty, and electronics, according to the company’s analysis of its customer data.
- To that end, some of Afterpay’s new merchant partners operate outside the apparel space, including cookware brand Made In Cookware and home decor company Poly & Bark.
Dive Insight:
The new partnerships mark Melbourne, Australia-based Afterpay’s continued growth since it entered the U.S. in 2018.
As of last year, Block-owned Afterpay had 4.2 million U.S. monthly active users, surpassing competitors like Affirm (3.3 million), Klarna (3.3 million) and Zip (755,000), according to Bank of America Securities data. In its announcement, the company noted that its new installment payment partnerships come at a time when younger consumers are looking for alternative money management tools to navigate inflation.
“Younger consumers have faced many financial challenges over the past few years, fueling the growth of alternative payments like Afterpay,” Alex Fisher, head of revenue at Afterpay and Cash App, said in a statement. “Our goal is to not only offer more transparent payment options, but to also promote a healthy and responsible customer base.”
Amid ongoing inflation woes, consumers have turned to installment payment providers when their budgets are squeezed. According to a report from the Federal Reserve Bank of New York this year, 60% of financially fragile consumers have used BNPL services five or more times in the previous year, a higher share than the roughly 20% of financially stable consumers who do the same. During the 2023 holiday season, shoppers spent $16.6 billion online via buy now, pay later companies, up 14% from the previous year, Adobe Analytics found.
