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Afterpay Extends Service To Some Merchants Regardless Of Partnership

Afterpay Extends Service To Some Merchants Regardless Of Partnership

June 23, 2021 at 05:42PM
by PYMNTS

Australian buy now, pay later (BNPL) firm Afterpay is giving some of its U.S. shoppers the ability to buy merchandise at retailers even if those stores don’t have a relationship with the company, according to a press release emailed to PYMNTS.

Afterpay is targeting this fall to extend purchasing power to shoppers at 13 retailers — CVS, Dell, Kroger, Macy’s, Nike, Nordstrom, Sephora, Target, Victoria’s Secret and more. Previously, the company’s BNPL users could only use the payment option at retailers it had already partnered with.

Afterpay charges fees between 4 percent and 6 percent to its retail partners and said it would get an affiliate fee for non-partnered retailers. The rates could fall as more rivals join the BNPL space, a Reuters report noted.

Competitors Klarna and Quadpay already offer users the ability to use their apps for BNPL at all U.S. stores, per the news outlet. 

“Over the past year, we all relied on online shopping for the things we needed during the pandemic. But, as we celebrate the physical re-opening of stores, consumers still want the convenience and flexibility of buying with the click of a mouse as part of their ‘new normal’,” Zahir Khoja, general manager of Afterpay North America, said in the release.

The company said eCommerce in the U.S. has “nearly tripled in the first three months of 2021” and last year posted online sales that increased 43.7 percent. 

Afterpay announced last month that it was opening its North American headquarters in Silicon Valley, a 50,000-square-foot space over two floors of the 11-story landmark Phelan Building. The location sits between the technology and retail centers of the Financial District and Union Square in San Francisco.

Klarna rolled out virtual cards earlier this month that gave U.K. users a one-time pay-in-three BNPL option at physical stores, even those that weren’t part of its retail network. The virtual cards operate over traditional card rails.