Afterpay to distribute more financial products including mortgages

What the pandemic has taught us is that it’s extremely important to create sustainability and longevity for our businesses and employees. And we all know, COVID-19 isn’t going away in a hurry. So one company went and pulled off a huge pivot – Australian buy-now-pay-later (BNPL) group Afterpay. 

Afterpay had been increasingly drawn towards banking services and naturally responding to the market demand. 

It had a sudden change in direction and made a major pivot with its new ‘Money by Afterpay app’ which will be released in October. Westpac is providing saving accounts to Afterpay customers under a ‘banking as a service’ arrangement. It’s a standalone finance app that earns you 1% interest rate on savings and won’t charge any fees. So their millennials customers who have used the payment app for online shopping will be offered a separate app for budgeting and saving. Neat huh? Westpac and Afterpay are also planning new products together. 

Building a business of scale

Aside from building the financial management app for young millennials, Afterpay has to make sure that they’re building a business of scale too. 

Early this month, Afterpay announced that it will merge with US digital payments giant Square in a deal worth $39 billion. Square, which is run by Twitter co-founder Jack Dorsey, has entered into an agreement to acquire all shares of Afterpay. This buyout means that Afterpay will be able to extend their market position more quickly in America.

There are many benefits to this relationship. Afterpay can now come out stronger and focus on their long-term growth agenda to distribute a wider range of financial products including mortgages. 

The natural progression is also adding new features to its existing apps imported from Square. Square’s Cash App in the US provides a range of financial services namely person-to-person payments, stockbroking and bitcoin trading. Also, Square could use the Money App to support its customers wanting to budget and save. It’s like a love bubble. 

​​“We see a very good opportunity to bring synergy from what is done in North America to what we are developing with Money by Afterpay in Australia, and probably vice versa as well,” Afterpay co-CEO Anthony Eisen.

On Wednesday, Afterpay announced it would allow merchants to advertise on its app which generates 1 million referrals a day to global retailers. This setup will also provide merchants with insights on how customers are spending through Afterpay iQ. 

Potentially world domination?

This BNPL company has proven to be “incredibly resilient considering the influx of imitators into the BNPL space” – said Mark Arnold, ch