One Million Consumers Signed Up for Installment Payment Plans in the Past 10 Weeks, Reports Afterpay

Many retailers are now reporting an uptick in sales, as brick-and-mortar stores reopen and customers prepare to resume their regular activity — and dress the part. And as consumer spending rises, so too has the number of shoppers utilizing a payment plan service for these purchases. Payment solution Afterpay announced this week that it has now reached 5 million active U.S. customers.

Afterpay, an Australian platform that lets customers pay for their purchases in four interest-free installments, has been in the U.S. market for two years, but the service has seen considerable growth in 2020. Of its 5 million active users in the U.S., more than 1 million were new customers that joined during the past 10 weeks. This represents a 30-40% increase in weekly run rate, in comparison to January and February.

These numbers mostly refer to e-commerce transactions, including on mobile. In April 2020, Afterpay reported more than 15 million app and site visits. Users browsing the Afterpay Shop Directory, which lists the platform’s retail partners, generated almost 10 million lead referrals. As Afterpay is available in-store at participating merchants, these numbers could continue to increase as more stores open.

“At a time in which e-commerce has become the primary way people are shopping, there is a growing interest and demand among consumers to pay for things they want and need over time using their own money — instead of turning to expensive loans with interest, fees or revolving debt,” said Nick Molnar, co-founder and U.S. CEO of Afterpay

The company also saw a change in the average basket size of customers. Afterpay reports that the number of items in Afterpay baskets increased by 40% during the period of March 1 to May 15, compared to January 1 to February 29. However, there is no public data available on average order value.

In addition to Afterpay’s 5 million active U.S. users, the platform has 4 million users currently considered inactive, meaning they haven’t transacted with the company in the last 12 months. This suggests that a large number of consumers are still exercising caution over their spending, particularly in the apparel category — Afterpay reports that searches between March 16 and May 15 were down for dresses (-20%), blouses (-32%) and high heels (-41%).

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