It looks like a consumer loan but without physical papers, documents and contracts and often without additional costs for consumers: digital payment solutions such as Afterpay, which allow a subsequent payment, divided into several smaller tranches, have seen an explosive growth in recent years , transmits AFP.
“Buy now, pay later,” as the Afterpay slogan says, the idea is to pay later, in full or in several installments, for an online purchase.
You no longer need to make a file or pay commissions as is the case with a credit card, everything is done with a few clicks at the time of payment.
“For users, it’s a less expensive alternative to credit cards for financing a purchase, and the payment process is more convenient,” said Nick Maynard, an analyst at Juniper Research.
Americans are the largest users of this type of payment, accounting for about a third of the total value of fractional payments made worldwide in 2020, but Asia lags far behind. In Europe the situation is variable. According to Sia Partners, installment payments last year accounted for 23% of online commerce revenue in Sweden and 19% for Germany. Far behind are Spain and Italy, with only 2%.
“Some consumers are unaware of the consequences of not being able to pay,” warns Steffen Sorrell.
For example, in the case of Afterpay, buyers who are unable to meet their payment deadlines are penalized. A consumer can also multiply his installment payments by using multiple offers.
Therefore, one of the major stakes of the sector is to find the means to verify the data of its customers without hindering the payment process.
The Australian start-up Afterpay, which is to be taken over by the American group Square for 29 billion dollars, is one of the best known in this segment, together with the Swedish company Klarna. But other players are also interested in the field, such as the PayPal payment service, the online commerce giant Amazon and even the French postal bank.
According to a study by consulting firm Kaleido Intelligence, the value of these installments has almost quadrupled between 2018 and 2020, reaching $ 80 billion worldwide, and by 2025 will exceed $ 250 billion.
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