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Afterpay’s Cross Border offers Kiwi retailers a world of customers

Buy-now pay-later Afterpay has launched a product that allows Australian and New Zealand Afterpay retailers to connect with all active customers on its Australasian network without setting up separate overseas websites.

By Sponsored content | July 31, 2019 | Sponsored Content

Afterpay Chief Product Officer Kareem Al-Bassam.

Afterpay is an Australian buy-now pay-later which offers customers interest-free payment plans for online and instore purchases. Customers can buy what they want immediately and pay it off in four equal, interest free fortnightly instalments, with no fees as long as they make repayments on time.

Afterpay helps retailers by driving conversion, increases basket spend, customer acquisition and its large Afterpay network. It achieves this through superior technology and product.

Since its foundation in 2015, Afterpay has grown fast and now processes approximately 10 percent of all ecommerce transactions in Australia. It has 3.5 million active customers, and more than 25,000 retailers on its network, including Myer, Officeworks, The Iconic, Big W and Sephora.

It launched in New Zealand in September 2017, and has achieved widespread adoption through retailers like Kathmandu, Glassons, Super Cheap Auto and Trade Me.

It’s now activated a new product called Cross Border, which will enable Afterpay’s New Zealand and Australian merchants to sell to shoppers in either country.

Cross Border trade allows customers to shop online from New Zealand at Australian retailers using their Kiwi Afterpay account. Making it easier for them to purchase the things they love overseas from the comfort of their own home. Designed by a Kiwi who works at Afterpay HQ, Lulu Young, the product is simple, easy to understand and has no hidden fees.

Shoppers are shown the price of the item and each instalment in NZD before they commit to buy and the retailer gets the full amount in AUD from Afterpay so they don't have to worry about currency conversion either.

Nick Molnar, CEO Afterpay says: “Following a successful trial of Cross Border with a handful of merchants, we are confident that it will add value to our retail partners and open up the opportunity for them to seek and delight new customers from different countries.

“Additional benefits to the retailers will include a simple propriety global payments solution which will also enable funds to be settled in their country of origin, with Afterpay taking away the complexity of foreign exchange. Customers will be able to pay directly in their currency and not be hit with any additional foreign exchange fees after the payment is processed.” 

Afterpay Chief Product Officer Kareem Al-Bassam says Cross Border is available now to all New Zealand online retailers and customers.

“The beauty of our cross-border product is that retailers do not need to have separate ecommerce sites set up in other countries to access international customers in the Afterpay network,” he says. “Once Afterpay is integrated into the retailer’s website it’s a simple as a quick phone call or email with our team to get the retailer set up, and they will have the ability to start transacting with international customers from Afterpay.”

Al-Bassam says that almost from the day Afterpay launched in New Zealand, the most popular customer request was for the ability to use Afterpay in other countries or shop from international retailers offering Afterpay. 

He says Afterpay also wanted to reduce the confusion that can arise from paying online in different currencies: “Our product aims to be completely transparent so the customer knows exactly what they are spending in their local currency.”

Afterpay trialled its Cross Border initiative with retailers in New Zealand and Australia before rolling it out in March. Al-Bassam says shoppers are already very familiar with shopping internationally – the January 2019 New Zealand Online Retail Sales report from Marketview and BNZ indicates New Zealand’s total online retail spending for that month was 6 percent higher than in January 2018.

Annual online spending across the retail categories Marketview covers is now running at approximately $4.6 billion. Excluding food and liquor, annual online spending is now equivalent to 11.4 percent of retail sales, and spending with international merchants has hovered between 45 and 35 percent of all online purchases since 2015.

“The take up of the Afterpay service by customers has been really positive and will continue to grow as more retailers come onboard,” says Al-Bassam.

Afterpay has seen a lot of success in the fashion, kids, activewear and beauty categories, and Al Bassam expects to see continued success in other categories.

According to Nielsen’s 2017 ‘Connection and contrast’ report, New Zealand and Australia share similar demographics in terms of age and gender. With 19.9 million consumers versus New Zealand’s 3.7 million, Australia’s market is slightly more urban and slightly less multicultural than New Zealand.

One key distinction for Kiwi retailers looking to sell into Australia is Australians’ greater interest in buying locally-made products – three in five Australians try to buy Australian-made products, versus one in two Kiwis buying New Zealand made as often as possible. 

Another difference lies in New Zealanders’ notorious focus on discount buying – 55 percent of Australians say they “tend to hold out for a sale”, versus 73 percent of Kiwis.

Al Bassam expects New Zealand’s Afterpay merchants to be popular with Australian consumers: “Australian customers are very interested in purchasing from Kiwi brands and we have seen this in our pilot trials. My family has loved being able to buy from a New Zealand owned company that makes baby clothes.”

The biggest tip he can offer is to work with the Afterpay marketing team on how you can use Afterpay to attract new Australian shoppers.

“Once retailers are onboarded, we have a handy tips and tricks guide which gives them marketing tips and key phrases and creative assets to let customers know that they now offer Afterpay to customers based in overseas markets where Afterpay’s Cross Border product is offered.”

New Zealand retailers interested in integrating this product into their website can contact Afterpay NZ at: sales@afterpay.co.nz.

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