In a press release, Afterpay Ltd (ASX: APT) announced it will launch a new feature that allows customers to turn eligible debit transactions into four instalments.
The product will be dubbed “Afterpay Retro”.
No – not as in trendy 60’s fashion.
This is about converting retrospective transactions into Afterpay’s buy-now-pay-later (BNPL) offering.
Afterpay Retro?
The feature will be launched within Afterpay’s money and lifestyle app, Money by Afterpay.
Money by Afterpay is effectively a bank account with a debit card. It allows users to earn 1% interest on up to 15 savings account with no monthly account fees.
Users will be able to turn a past transaction into four instalments, with the first due in two weeks time.
Let’s say you go out for dinner with some friends. The restaurant doesn’t split bills so you offer to grab the pay for everyone. Except when you get home you realise you don’t have a spare $160 to cover them.
To solve this, you decide to retrospectively split the transaction into four instalments. Then you can pay off the transaction in $40 instalments without fees. Problem solved.
The nitty gritty
Afterpay Retro will be up to $200 of a customer’s total Afterpay limit.
So if you have a $1,000 spending limit, you can use up to $200 on Retro and $800 for other BNPL purchases.
The Money by Afterpay app is only available to select Afterpay and Westpac employees.
Therefore customers can sign up for the public waiting list for when its launched to the public.
Afterpay is eating the world
Afterpay noted the Retro concept was highly sought after by customers. In fact, it was second only to no payment upfront.
Effectively, Afterpay is encroaching – if it wasn’t already, on the market share of credit cards.
The Retro product removes overdraft fees and interest incurred on regular credit products.
By bringing more and more users into its ecosystem, Afterpay is building a one-stop solution for everyday spending needs.
“As we continue building out the Money experience, we’re creating a platform for customers to change the way they think about their money. The integration of BNPL and now Retro will give customers a one-stop app for their money management, allowing them to be more in control of their money than ever before. Customers can forgo salary advance apps or overdraft facilities in favour of a single solution that doesn’t charge fees” – Executive Vice President of New Platforms, Lee Hatton
My take
I think this is an awesome move by Afterpay. It’s further embedding itself in its users’ lives by rebundling credit in ways that add value to customers.
If you pay on time, we will reward you with no fees. It’s that simple.
You can see why Gen Z and Millennials are flocking to them in droves.
