Recharge.com expands into Australia
European branded payments company Recharge.com today announced the launch of its services in Australia. The fast-growing fintech firm, which specialises in digital gift and prepaid cards for brands including Netflix, Spotify and Xbox, is rolling out its services amidst regulatory changes in the buy-now-pay-later (BNPL) and the gift card sectors.
In Australia, digital technologies have seen a consistent surge, with 55 million non-cash payment transactions worth $650 billion happening every single day. The nation is home to some of the world’s largest BNPL firms, including Afterpay, which holds nearly 70 per cent of the market share of BNPL transactions, with 16.2 million international customers, including 3.3 million in Australia.
BNPL has exploded in recent times, with the Reserve Bank of Australia reporting that the value of such transactions has more than tripled over the past five years. However, many BNPL firms fail to check credit scores, opting instead to put a cap on late fees to stop a user from spending after they skip a payment. Also, 55% of BNPL users in Australia are under the age of 40.
The Australian Securities and Investments Commission has shown that one in five customers missed BNPL payments in 2018-2019. To introduce more oversight around the sector, Australia’s central bank announced stricter regulation in October 2021, meaning that firms like Afterpay would no longer be able to stop merchants from passing on surcharges for their services.
Alongside these measures is a rising interest in the Pay Now Buy Later (PNBL) sector, driven by branded payments and gift cards that can be purchased upfront and used at a later date. The adoption of gift cards spiked during the COVID-19 pandemic, with major employers incentivising staff through providing such cards that employees could use for shopping, entertainment and call credit.
This trend was accelerated by the Australian government’s announcement that gift cards bought after November 2019 must expire three years after the date of purchase instead of having a one-year validity. This increased momentum for the gift card sector, which is now set to increase by 12.2 per cent annually.
The trend bodes well for Recharge.com, a one-stop-shop marketplace of various categories of branded payments, including call credit, data bundles, shopping, entertainment, gaming, and prepaid money.
Commenting on the company’s entry into Australia, Günther Vogelpoel, CEO of Recharge.com, said, “We are thrilled to be expanding into Australia and to offer consumers safe and smart ways to access a wide variety of services and experiences. The pandemic has increased the human need for connection, often through entertainment and gaming, and we are proud to be helping consumers to access the things that matter to them while remaining secure online and within household budgets.”
One of Recharge.com’s competitive advantages is that unlike local websites and other global brands operating in the market, the fintech firm is offering a well thought out, seamless, next-level user experience that takes in local preferences and requirements through its platform’s design and functionalities.
Founded in 2010 and headquartered in Amsterdam, Recharge.com is fast gaining ground in the world of branded payments, a rapidly growing $3+ trillion industry that is being heavily disrupted by digital. The growing ubiquity of digital gift cards and top-ups is driven by multiple factors, including high smartphone penetration, the rise of e-wallets and alternative payment methods — all accentuated by the COVID-19 pandemic and the growing need for privacy in digital cross-border transactions.
