Afterpay claims savvy pensioners are switching to trendy app

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“The important thing for us is to work closely with regulators, with law makers and with the wider community to explain who we are and what we do,” Mr Eisen said in his speech.

The ASX-listed company said customers’ increasing mistrust of big banks’ credit cards had been central to its growth.

More than 80 per cent of Afterpay users link their accounts to debit cards rather than credit cards, Mr Eisen said.

Afterpay charges retailers a fee of between 4 and 6 per cent of purchases in order to offer the buy-now, pay-later service. That’s about 2 per cent more than processing a standard credit card payment.

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“In addition we bring a whole lot of new customers to the retailers – the other benefit is that we pay the retailer the next day,” Mr Eisen told Fairfax.

The company said a diverse range of customers use its system, from families setting up Christmas shopping ahead of time and pensioners using the service to break large payments into smaller amounts.

Afterpay boosted its group revenue by 390 per cent in the 2018 financial year, booking $142.3 million. It shaved 7 per cent off its net loss after tax last year, finishing up $9 million in the red.

The startup said it was trying to reduce the amount of revenue it makes through late fees. In the 12 months to June 30, late fees made up close to one quarter of all revenue, with the remaining three quarters coming from merchant fees.

Afterpay’s share price is up 116 per cent on this time last year, sitting at $11.48 on Monday. It has fallen from its August high of $21.13, with shares dropping more than 18 per cent on the day of the announcement of a Senate inquiry into payday and alternative lenders. 

Meanwhile, the ‘Kylie Jenner effect’ is front and centre of the company’s US strategy, with the model and socialite recently adding Afterpay for the sale of her Kylie Cosmetics brand.

“Very soon, if not already, she will become the youngest self-made billionaire in history. And because she wants Afterpay, her people are willing to give Afterpay a go.”

The company confirmed it had signed 1000 retailers in the US marketplace so far during its soft launch.

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