If you are an online shopper yourself, then you have probably seen a version of the "AFTERPAY" banner somewhere on your favorite brand's homepage.
SO WHAT IS AFTERPAY?
Afterpay (a credit line) makes it extremely convenient for potential customers to order items from your store although they only paid a portion of the full price. Items will still ship as normal (as if it was paid), however the buyer can divide the full price into payments for up to 8 weeks. Afterpay will assume all potential risk and fraud as all payments will be made to them. THIS IS NOT LAYAWAY, you will be paid the full amount immediately upon your customer receiving their purchase.
To sign up for Afterpay, simply apply via their website and a customer service representative will contact you to get more information about your business needs. Dependent on your business agreement with Afterpay, fees can vary. However, the fees below are a general guide as to what businesses can expect with an Afterpay agreement.
A $0.30 fee per transaction.
A commission rate fee that is applied per transaction. This can range from 4-6% based on your agreement.
WHAT BENEFITS DOES AFTERPAY OFFER MY BUSINESS? Afterpay works both online and in-store. If a customer buys something online using Afterpay, they simply select Afterpay at the checkout, and once the customer has received their item, Afterpay will settle with you and assume any credit or fraud risk. The instalments that the customer pays go to Afterpay instead of you since Afterpay will pay the debt that is owed to you initially.
BENEFITS OF AFTERPAY
increased sales and new customers
rise in repeat purchases
zero fraud or credit risk
IS AFTERPAY WORTH IT?
Now that we have briefly went over how Afterpay works, you're probably wondering is it worth it. It sounds good and is pretty convenient, but is it worth the extra fees and will it really increase my order value. There isn't a clear cut answer to this, but if you diagnose your store and the type of traffic, product prices and customers you have, you can easily determine this yourself. Be real with yourself about your current shipping policy, product prices and more. Determine if the transaction fees and commission rates still allow you to profit when you sell an item at regular price or on sale.
Sezzle is a similar program offering many of the same benefits as Afterpay.