Two of the most popular Australian fintech startups, Tyro and Afterpay, have declared a new partnership that will see a “buy now, pay later” option rolled out to 17,000 merchants.
Afterpay is an ASX-enumerated company that allows consumers to purchase and receive products immediately but pay later without penalty or interest. Tyro has announced that, within the first half of this year, merchants that use its EFTPOS facilities will be able to offer Afterpay to customers.
Tyro has more than 14,000 retail customers and hopes that Afterpay’s involvement 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 placed 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 primarily concentrating on online shopping thus far, Nick Molnar (Managing Director of the company) said the Tyro deal lifts 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.
Customers 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 downed about 4% of the price.
Both startups are running after a beneficial retail market, which consists of 140,000 industries that employ 1.4 million Australians and contributes 4.1% of the national GDP, according to the Productivity Commission.
Tyro, after becoming the first fintech startup to attain an APRA banking license in August, is running 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 stakeholder 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 twice over since listing on the ASX last May and counting 250,000 customers as of November.