Two big-name Australian fintech startups, Tyro and Afterpay, have announced a new partnership that will see a “buy now, pay later” option rolled out to 17,000 retailers.
Afterpay is an ASX-listed company that allows consumers to buy and receive products immediately but pay later without penalty or interest. Tyro has announced that, sometime within the first half of this year, retailers that use its EFTPOS facilities will be able to offer Afterpay to customers.
Tyro has more than 14,000 merchant customers and hopes that Afterpay’s contribution makes those retailers more enticing to the end consumer.
“We give them all the payment options that their customers want, and now with our partnership with Afterpay, our merchants will be better positioned to attract more of the $500 billion spent annually by Australians on their credit and debit cards,” said Tyro chief executive Gerd Schenkel.
With Afterpay mainly concentrating on online shopping thus far, the company’s managing director Nick Molnar said the Tyro deal boosts its plan to conquer bricks-and-mortar.
“This will allow Afterpay to be rapidly rolled out to significantly more in-store retailers, which is a key objective for us in 2017,” he said.
Consumers that use Afterpay pay exactly the same as other customers as long as the payment is made on time. The AFR reported last month that Afterpay gets its revenue from merchants, which are slugged about 4% of the price.
Both startups are going after a lucrative retail market, which consists of 140,000 businesses that employ 1.4 million Australians and contributes 4.1% of the national GDP, according to the Productivity Commission.
Tyro, since becoming the first fintech startup to acquire a APRA banking licence in August, has gone on an executive recruitment spree, hiring former UBank executive Schenkel in October, ex-PayPal figure Kareem Al-Bassam as head of product in January, and another ex-UBank staffer Natalie Dinsdale in February.
In October, founder and major shareholder Jost Stollmann was named number 21 in the Business Insider Tech 100.
Afterpay has also had a good time in the past year, seeing its share price double since listing on the ASX last May and counting 250,000 customers as of November.