How Afterpay Makes Money

Afterpay is a ‘Buy Now, Pay Later’ (BNPL) service that allows consumers to pay for goods and services over the course of multiple installments. 

Over 19 million consumers have used Afterpay to shop at brands such as Adidas, Lululemon, and Pandora. 

Afterpay was founded in 2014 by Nick Molnar and Anthony Eisen who were neighbors at the time. Molnar himself was only 24 when he started the firm. 

In 2016, they took the company public on the Australian Stock Exchange, raising an additional $150 million in the process.

Five years later, payment giant Square (now Block) acquired Afterpay for $29 billion in an all-stock deal. 

In 2021, Afterpay generated ~ $621 million in revenue. But how does the company actually make money? 

Merchant Fees

Merchants are charged 30 cents plus commission for every transaction they record. The commission itself ranges from 4 to 6 percent.

Merchants can advertise their products and services on the firm’s shopping app. They pay Afterpay for every click that their advert receives.


Late Payments

Customers who miss their installments are charged penalty fees of up to $68. An initial fee of $10 is applied for the first missed payment.

Afterpay offers a digital debit card that can be used to pay at selected stores. It collects interchange fees whenever customers use said card.


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