Afterpay's US foray carries high expectations

Afterpay Touch Group ((APT)) continues to attract investors’ attention as a rapidly growing fintech that has established itself as the market leader in ‘buy now, receive now, pay later’ finance for both online and instore shoppers.

Afterpay recently announced a strategic partnership with experienced tech-focused US venture capital firm Matrix Capital Partners, which will invest in and advise on the Australian company’s US expansion plans.

Afterpay IPO-ed in 2016 and in June 2017 merged with another listed fintech, Touchcorp, to form Afterpay Touch Group.

The company’s deferred payment product allows shoppers to make purchases without interest charges, up-front fees or loan application forms. Consumers typically pay off these ‘reverse laybuys’ in four equal fortnightly instalments.

Afterpay’s revenue comes from merchant fees, which averaged 4.1% in 2016-17, plus late fees levied on users who miss deadlines.

The Touchcorp side of the business provides the Touch System Platform, which the company says offers advantages including fraud protection, regulatory compliance, and data collection and analysis.

Afterpay’s algorithms assess the shopper’s repayment capabilities and risk of fraud automatically and in real time.

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Source: Afterpay’s US Foray Carries High Expectations – FNArena