Afterpay, whose service is more likely seen at retailers, has just done a fly now, pay later deal with Jetstar, its first in the travel industry.
A short time ago, Afterpay shares, which listed on the ASX in May 2016 at $1, were up 9.5% to $4.38.
From today, Afterpay will be available on Jetstar.com initially for domestic flights for transactions between $200 and $1,000 purchased eight weeks or more in advance of travel.
Afterpay and Jetstar may consider extending the payment service to more domestic services as well as international flights.
The financial of the deal haven’t been revealed. However, Afterpay’s service, which costs nothing for consumers, typically takes a 4% cut from retailers.
Nick Molnar, the head of Afterpay, says the Jetstar agreement provides the opportunity to move into a new vertical, especially in a market where millennials are very active and spending on travel is growing as a percentage of their disposable income.
“There has been a clear shift in millennials share of wallet towards service industries and more specifically travel,” he says.
“At Afterpay, we are focused on offering Afterpay for life’s little luxuries and we believe the demand for Afterpay in the travel market will be very strong.”
Jetstar CEO Jayne Hrdlicka says she’s excited to be the first airline in Australia to offer Afterpay.
“Our mission at Jetstar is to offer low fares to enable more people to fly to more places, more often,” she says.
“By partnering with Afterpay we are giving our customers another payment option to purchase their next holiday, making travelling more often more achievable. Many of Jetstar’s customers already use Afterpay to purchase items at retailers and are familiar with the flexibility of paying over time.”