Afterpay Valuation, page-1810

You can guarantee some will offer it with an added surcharge if allowed. The retail industry isn't pushing for this option for no reason. And that's when the experiment starts. When somebody goes to a purchase on afterpay and sees the extra 3-7% to use afterpay they'll either:

1) Still use afterpay.
2) Pay upfront instead.
3) Decide not to purchase.

Number 3 is an awful result for the retailer since they lose a sale. I'd say most people will still go through with the purchase but you don't need many to decide not to for the retailer to be badly hurt. Number 2 is great for the retailer (higher revenue than previously with afterpay) and awful for afterpay. Not only do they lose a sale but they lose a sale from a highly credit worthy purchaser. Number 1 is good for the retailer (more revenue than previously with afterpay) and no change for afterpay. In none of these instances does afterpay generate more revenue or more sales which is why it's obvious afterpay will fight against that option for merchants.

It's completely unclear what happens to these stores. Maybe it hurts them and the few that add the surcharge change back quickly. In that instance nothing changes. But maybe it helps them because they bring in more revenue per sale and almost nobody decides not to purchase. I don't know how likely it is but if that happens then within a year most merchants are adding a surcharge and afterpay will be badly hurt. It's a risk that's hard to quantify but it's got big potential downside and no upside.