Scale to profit: Afterpay, Zip plot global domination
Rapid offshore expansion propelled by the accelerating shift to e-commerce during the coronavirus pandemic has helped buy now, pay later leaders Afterpay and Zip double their revenue over the past financial year but kept their bottom lines in the red.
Afterpay co-founder Anthony Eisen said the move away from credit cards has increased during the crisis as customers take a more prudent approach to managing budgets.
“We need to make sure we make the most of these structural shifts,” he said. “The momentum we have seen in the last few years is continuing and accelerating. It makes perfect economic sense to be investing in this scale opportunity.”
Buy now, pay later is an increasingly popular instalment payment service which is mainly paid for by merchants and free to customers unless they incur late fees.
Afterpay, which is expanding from its Australian base to Canada and Europe with parts of Asia next, halved its net loss for the year to June 30 to $22.9 million. Zip, which is expanding in the US and Britain and operates in South Africa, doubled its loss to $20 million
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