{"id":313824,"date":"2021-08-02T10:24:14","date_gmt":"2021-08-02T07:24:14","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/afterpay-the-29-billion-aussie-startup\/"},"modified":"2021-08-02T10:24:14","modified_gmt":"2021-08-02T07:24:14","slug":"afterpay-the-29-billion-aussie-startup","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/afterpay-the-29-billion-aussie-startup\/","title":{"rendered":"#Afterpay, the $29 billion Aussie startup"},"content":{"rendered":"

“#Afterpay, the $29 billion Aussie startup<\/strong>”<\/p>\n

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Australian fintech Afterpay is being bought out by US digital payment platform Square\u2014less than seven years after launching as a “buy now, pay later” start-up.\n <\/p>\n

Twitter<\/a> boss Jack Dorsey’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>\n

What is Afterpay?<\/p>\n

Afterpay operates a “buy now, pay later” app<\/a> that allows users to pay off smaller purchases in regular instalments.<\/p>\n

Unlike a credit card, users are not charged interest or a joining fee and spending limits are kept low.<\/p>\n

But those who fail to meet their scheduled payments are hit with late fees\u2014for Australian users up to 25 percent of the purchase price, with a cap of Aus$68 per order.<\/p>\n

The company makes most of its money by charging retailers for transaction costs.<\/p>\n

Stores using Afterpay lose around four percent of the transaction’s value, but get the rest of the cash upfront and are not exposed to the risk of non-payment.<\/p>\n

Who is behind the company?<\/p>\n

Afterpay was co-founded in 2014 by Australians Anthony Eisen and Nick Molnar.<\/p>\n

Molnar, 31, was a young entrepreneur who sold jewellery online before building Afterpay in his Sydney home.<\/p>\n

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>\n

The pair were billionaires even before the deal with Square, which is expected to send their fortunes skyrocketing. <\/p>\n

How popular is the app?<\/p>\n

As well as Australia, Afterpay is now available in the United States, Canada, the United Kingdom, France and Italy. <\/p>\n

The app now boasts more than 16 million customers worldwide and works with almost 100,000 retailers.<\/p>\n

Along with other “buy now, pay later” platforms, it has been credited with transforming the way young people spend online.<\/p>\n

What’s the catch?<\/p>\n

Some critics have raised concerns that Afterpay and similar apps may tempt people to spend money they do not have.<\/p>\n

The “buy now, pay later” industry is largely unregulated in most countries, prompting calls for regulators to step in to protect consumers.<\/p>\n

In March this year, Afterpay was among eight companies operating in Australia who created and signed a voluntary industry code of conduct.<\/p>\n

It also agreed to pay almost US$1 million after being accused by Californian regulators of operating a lending business without a licence.<\/p>\n

Why is Square buying Afterpay?<\/p>\n

Square already operates a mobile payment platform, called Cash App, which has 70 million users per year.<\/p>\n

It plans to integrate Afterpay’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>\n

Both companies say the merger and acquisition will help them to expand, by reaching new customers and retailers.<\/p>\n

The deal is expected to close in early 2022.\n <\/p>\n\n

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Square to buy installment payment firm Afterpay in $29B deal\n\t\t\t\t\t\t\t\t\t\t<\/p><\/div>\n

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\n \u00a9 2021 AFP\n <\/p>\n

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\n Citation<\/strong>:
\n Afterpay, the $29 billion Aussie startup (2021, August 2)
\n retrieved 2 August 2021
\n from https:\/\/techxplore.com\/news<\/a>\/2021-08-afterpay-billion-aussie-startup.html\n <\/p>\n

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\n part may be reproduced without the written permission. The content is provided for information purposes only.\n <\/p>\n<\/p><\/div>\n<\/p><\/div>\n