The $4b buy now pay later startup built on a legal loophole

The $4b buy now pay later startup built on a legal loophole

“I’m pretty bad when it comes to shopping,” Amanda*, a 23-year-old disability worker based in Melbourne tells Fairfax Media. “If I liked it, I’d Afterpay it”.

It’s been said that the ultimate goal for a tech startup is to become a verb. If that’s the case, then Sydney-based Afterpay has well and truly made it.

Amanda started using the buy now pay later service in 2016. She used it to purchase clothes, electronics and Christmas presents. But when her financial circumstances changed, she quickly ran into trouble.

“When I started using it I was getting good money from work. I could afford the repayments, I always made sure I would do it the day after or two days after I got paid,” she recounts. “But then I had problems with my car, and I wasn’t working. I had to use pretty much everything I had to fix my car. I fell behind.”

Amanda is one of the millions of Australians who has bought products on Afterpay- the payments platform that has become both a cultural phenomenon, and a sharemarket sensation. But she is among the relatively few of them – if you believe the company – who has encountered strife after using it.

Over the past two and a half years, Afterpay has emerged from nowhere to become a $4 billion juggernaut – one of Australia’s biggest fintech successes.

It has amassed an army of devoted users, many of them millennials, who love the product, and a crew of faithful shareholders who gush about its stunning growth.

Afterpay’s shares are up nearly 2000 per cent over the past 2 ½years. Its co-founder and chief executive Nick Molnar, who is not yet 30, has skyrocketed up the rich list – his stake in the company is worth more than $400 million based on Friday’s closing price.

The company is now expanding into the US – where there are even more millennials, and much more shopping – and early signs are promising.


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Source: The $4b buy now pay later startup built on a legal loophole

*Name changed to protect identity.