‘Afterpay has always stood apart in the way it connects with customers around common core values of simplicity, transparency and trust.’
Hype around this product, which was being rolled out with the help of Westpac’s white-label banking as a service product, has been building for some time.
The sell-side has been particularly keen, with Morgan Stanley analysts – who have been consistently bullish on the name – in June making the rather bold claim that the service could help Afterpay double its Australian revenue.
Quantifying that impact: by 2025, the investment bank thinks Afterpay Money could contribute as much as $589 million in revenue to the group.
And as one final point, as we wrote previously, ‘Beyond its potential positive impact on the top-line, [Morgan Stanley thinks] Afterpay Money could also help the company boost engagement, reduce processing costs, and provide the company with more granular data on its customers.
These bold estimates were tempered by some concrete details courtesy of Afterpay on Tuesday, 20 July.
Described as a money and lifestyle app – ‘Money by Afterpay’ – is aimed at helping individuals ‘trust themselves with money management’ and will initially give its users access to:
- A 1% per annum interest account
- A daily account with an attached, physical debt card, digital wallet, as well as the ability to send and receive payments
It was noted that it is currently proposed that the Afterpay Money daily account would not charge its customers fees, which according to the company, would make it ideal for daily and commonplace transactions. To access the Afterpay Money App, users would need an existing Afterpay account.
Management said they intended to rollout Afterpay Money in October after trailing the service amongst employees in July.
Elsewhere, the company announced that it had been granted an Australian Financial Services License (AFLS), which would enable Afterpay to provide general financial advice to its customer-base.
According to co-CEOs, Anthony Eisen and Nick Molnar:
'Afterpay has always stood apart in the way it connects with customers around common core values of simplicity, transparency and trust. Ultimately, with Money by Afterpay, our goal is to make managing your money simple, frictionless and stress-free.'
‘The money app, which will be rolled out through the company's banking as a service collaboration with Westpac, demonstrates that Afterpay ‘can quickly move at pace to get well ahead of customer expectations and bring both cutting-edge features and true 'surprise and delight' to the experience,’ the co-CEOs added.
The Afterpay share price finished out Tuesday's session 1.64% higher at $106.62 per share. The stock continued to rise on Wednesday.
Do you have a view on the markets? Whatever you think, you can use CFDs to trade stocks and other assets, through IG’s world-class trading platform.
For example, to buy (long) or sell (short) a variety of local and international stocks using CFDs, follow these easy steps:
- Create an IG Trading Account or log in to your existing account
- Enter <Company name> in the search bar and select it
- Choose your position size
- Click on ‘buy’ or ‘sell’ in the deal ticket
- Confirm the trade
Shane Walton | Financial Writer, Australia
21 July 2021