Afterpay's Economic Impact in Australia

Afterpay connected 129,000 Australian merchants to 3.5 million active customers, generating $13.4 billion in sales in 2023

Afterpay was founded in Sydney in 2014 and has grown to serve 3.5 million active Australian customers, unlocking interest-free instalment repayments for consumers. Afterpay connects Australia’s most popular brands with next-generation consumers. The service is offered by 129,000 Australian merchants, including thousands of small and medium businesses operating in locations throughout Australia.

More and more customers choose Afterpay because it offers a low-cost, zero-interest finance option, especially compared to traditional credit options. In 2023, Australian merchants generated $13.4 billion in total sales via Afterpay.

Afterpay offers a seamless experience across online and offline shopping that provides consumers with control, flexibility, and transparency over their finances.

Afterpay reached 3.5 million active customers in 2023, who valued it as an alternative low-stress, low-cost form of finance that helps manage spending and connects with an online directory of stores. 

Younger consumers – Gen Z and Millennials – have a strong preference for BNPL and are much less likely to own a credit card if they have used BNPL in the past 12 months. More than half (54 per cent) of consumers reported that BNPL reduces the stress of large expenses, with households using BNPL to income smooth or to spread large expenses across multiple paychecks without dipping into their savings.

"Australians who use BNPL are significantly less likely to own credit cards, which represents a notable shift in consumer behaviour. The research indicates BNPL is being favoured by households because it enables large expenses to be spread across multiple pay checks without dipping into savings. This is a different model of household income management to what we have traditionally seen with credit cards." - Amit Singh

Afterpay delivered $138 million in consumer surplus in 2023

Afterpay’s 3.5 million active Australian customers each derived $39 on average in ‘consumer surplus’ benefits in 2023 equating to $138 million in total benefits derived through Afterpay’s spending management capability, ability to smooth out each purchase, and the convenience benefits of accessing the Afterpay online shop directory.

Afterpay’s zero interest model also saved Australians $127 million in consumer fees and interest compared to credit cards in 2023.

Including late fees, Afterpay active customers paid on average 0.6 per cent in costs over their purchase price. This is significantly less relative to credit card purchases, where average costs are nearly 3 times higher at 1.5 per cent.

Afterpay delivered $5 billion in net benefits to 129,000 Australian merchants in 2023

Australian merchants generated $9.6 billion in incremental sales through Afterpay in 2023. Afterpay also delivered increased sales in products and verticals where overall sales across the economy were down.

In addition, Australian merchants enjoyed $711 million in cost efficiencies through Afterpay including:

• Lower cost of servicing online sales;
• Reduced customer acquisition costs through the Afterpay shop directory; and
• A reduction in return rates for products purchased online.

Afterpay contributed $3.9 billion to Australian GDP and supported 39,000 Australian jobs in 2023

Across the economy, Afterpay enabled merchants to generate incremental sales that supported $2.2 billion in direct economic benefits to retailers, and $1.7 billion in indirect economic benefits across the supply chain. 

An estimated 27,000 people were employed directly by merchants to support Afterpay sales in 2023. An additional 12,000 jobs were supported indirectly through the supply chain.

A copy of the full Afterpay Economic Impact in Australia report, including case studies and additional information on the research approach and methodology, can be found here.