It seems more sales that Afterpay makes – the more challenging financially it is for the company: Revenue $2Bn (From $43Bn transactions) – Merchant fees $1.65Bn – Late fees $211Million (Up from $87Million) Net Loss $615Million Bad debts $475Million.
The recent launch of the AfterPay credit card and the clean out of the merchant and customer books will mean that AfterPay will look very different in 2024. It is expected to evolve into a more traditional consumer lending business with Buy Now – Pay Later being merely a feature.
Zip Pay has a big challenge in that it has to refinance $1.76B in debt next year and commentators say this will be a challenge for them. This article from 2 days ago is worth reading: https://www.bankingday.com/zip-refinancing-burden
So much for disrupting credit cards.
Meanwhile, LayBy continues to be available from many local retail businesses. It is easy to manage in the software and can help people purchase from you within a cashflow budget.
The challenge with LayBy is that the purchase can be easily cancelled. But that is manageable if you factor it into your forecasting.
Through my software company I know of many retailers offering LayBy with terrific success. There are some doing thousands of LayBy transactions each year.
LayBy setup and management is easy, structured, dependable. While there is state / territory based legislation to follow, the business you can win makes offering LayBy worthwhile.
LayBy is another way local small business retailers can differentiate their businesses from big business competitors.
Given the continuing noise in the media about the economy, offering LayBy could be a a response from your business that resonates with some.
My advice is to ensure you have your processes down and your rules in place, and that they sit within the regulations for your jurisdiction. Consider a LayBy establishment fee. This can qualify the participants. What you do here depends of the products you offer and the margin with you operate.
If you compare LayBy with Buy Now Pay Later offers from AfterPay and Zip, it can look good for you.
Do your homework and see if LayBy could be good for your customers and for your business.