Afterpay Touch Group Ltd (ASX: APT) shares rose 2% on Wednesday and defended itself against an ASIC report into the buy now, pay later industry. The buy now, pay later business is holding its annual general meeting (AGM) today.
Afterpay Touch is the owner of the popular “buy now, pay later” app. As of 2018, Afterpay had over 2.5 million registered users worldwide, making it one of Australia’s true technology success stories.
Afterpay responds to the ASIC report
After a 10-month review, ASIC recommended extending its product intervention powers as the most appropriate way to regulate the buy now, pay later industry, including Afterpay.
The ASIC powers would allow the regulator to intervene if there was a, “significant consumer detriment“.
ASIC did confirm that Afterpay is different to traditional credit products because Afterpay does not ‘charge consumers for providing credit’ and is therefore not regarded as credit under the National Credit Code.
Whilst Afterpay supports amendments to the industry, management re-iterated that Afterpay has a unique business model and wants to keep serving its millions of responsible customers and 20,000 retailers.
Afterpay said that it has enhanced its process, contract terms, capped late fees and introduced enhanced external ID verification checks. Afterpay said that its model relies on merchant fees to generate profit rather than charging the customer.
Annual General Meeting (AGM)
Afterpay didn’t release any market-sensitive information, but it did say that in less than six months in the US it is live with over 1,150 retailers and has reached 450,000 US-based customers.
Management boasted that the business has achieved more in six months in the US than it has achieved in the first two years in Australia. In a recent business update, it announced it had achieved underlying US sales of AUD$115 million.
Some of the first US retailers to sign up for Afterpay included Urban Outfitters, Skechers, Steve Madden and Kylie Cosmetics.
Afterpay Executive Chairman Anthony Eisen said:
“Today we are an ASX 200 company; over 10% of the Australian purchasing population use the Afterpay service and we process well over 10% of all Australian online commerce.”
“We have over 2.5 million customers, over 20,000 retail partnerships and we are attracting the attention of the biggest and most recognised regional and global brands.”
The Afterpay share price has risen by 72.4% over the past six months, despite the recent volatility.
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