Over 5 million Afterpay (ASX: APT) users are now actively using the buy-now-pay-later service in the United States despite only launching there two years ago.
In total, almost 9 million have signed up to the service.
According to Afterpay’s co-founder and chief executive officer Nick Molnar, the company’s strong performance in recent months, despite the effects of COVID-19, could be an indicator of even better times once consumer spending returns to normal after lockdowns are lifted.
This comes on the back of Tencent’s decision to acquire a 5% stake in the e-commerce payments company earlier this month.
Afterpay’s business strategy is to empower shoppers to obtain goods from merchants immediately but to pay for those goods over the course of multiple instalments.
To achieve this, the company agrees on deals with various merchants to ensure they are paid immediately, while customers are required to pay borrowed capital back to Afterpay rather than the merchant.
Importantly, the service is free for customers that do not lapse on their repayments including a lack of interest, fees or further debt extension options.
In a statement to the market, the “buy now, pay later” payments company said it has now onboarded nearly 9 million US consumers onto its platform, including more than 1 million new customers in the last 10 weeks – quite likely as a consequence of the COVID-19 pandemic encouraging people to shop online.
More specifically, Afterpay estimated that its performance over the past 3 months represents a 30-40% increase in the weekly run rate from January and February.
“These milestones have been achieved after launching in the US just two years ago – making Afterpay one of the fastest-growing e-commerce payment companies in the market,” the company said.
To date, Afterpay has accrued more than 15,000 brands and retailers that offer Afterpay’s service to their customers, including the likes of American Eagle, Birkenstock, Furla, Herschel, Lancer Skincare and Marc Jacobs Beauty.
In total, Afterpay says it has assisted its merchant partners to process $2.4 billion so far this year – a 354% increase compared to the previous financial year.
In April, the payments company recorded more than 15 million app and site visits, while its US Shop Directory contributed nearly 10 million lead referrals to its retail partners.
“At a time in which e-commerce has become the primary way people are shopping, there is a growing interest and demand among consumers to pay for things they want and need over time using their own money – instead of turning to expensive loans with interest, fees or revolving debt,” said Nick Molnar.
“We feel so grateful to partner with the merchant community to support their shoppers and help them attract more customers, as commerce and retail starts to rebound over the next several months,” he added.
Afterpay’s shares were up 3.3% to $44.33 in morning trade, valuing the company at almost $12 billion.