Call to get on board Afterpay’s US bandwagonAfterpay founder and CEO Nick Molnar. Picture: David GeraghtyEXCLUSIVEELI GREENBLATSENIOR BUSINESS REPORTER@EliGreenblat12:00AM MARCH 19, 2019NO COMMENTSNick Molnar, the co-founder and chief executive of juggernaut payments platform Afterpay, says he is disappointed Australian retailers have been slow to take advantage of its burgeoning operations in the US, arguing that local brands should piggyback off the fintech company to launch into the world’s biggest economy.He said the wash-up from the recent Senate inquiry into the “buy now pay later” industry — which could have kneecapped his business if it came out with recommendations for a strong regulatory crackdown — fostered self-reflection at Afterpay and enhanced its mission to build greater trust in the service. After holding the company’s first live event in Melbourne yesterday for 300 of its small-to-medium business retail partners, Mr Molnar told The Australian that Afterpay was on its way to becoming a global payments platform with the aim to execute $20 billion worth of transactions within three years.This would be helped by a new service allowing easier cross-border trade between Afterpay users and retailers in Australia and New Zealand, which was unveiled yesterday. It will help smooth out currency and exchange issues and streamline transactions between the two countries.READ NEXTMARGIN CALLQantas puts Anning under reviewCHRISTINE LACY, WILL GLASGOWHowever, he declined to predict when Afterpay would post its maiden profit, pointing to its recent strong pre-tax, interest and depreciation earnings and cashflows for the December half as signs that the company was heading in the right direction.Riding a wave of excitement over its launch in the US last year, Mr Molnar said Australian retailers were missing an opportunity by not embracing the payments platform to use as an opening to the US market.“I think our biggest value proposition comes back to this one global platform and how we enable Australian retailers to scale.“And there is not one Australian retailer in our top 20 retailers in the US — that is really disappointing. We would love to change that.“So from my perspective, how do we really enable our retail ecosystem here to globalise, export and really take amazing brands to the world?“We would love to see some of these amazing brands in Australia start to make their presence felt in the US, Britain and whenever it goes live in other markets.”Afterpay has proved incredibly popular among shoppers, particularly millennials, who are increasingly shunning credit cards, and retailers who can offer the Afterpay payments system to attract more consumers to their stores — both bricks and mortar and online.The Afterpay platform has more than 3.1 million users and over 25,000 retail merchants.Such is its success that Mr Molnar says the company name is being used as a verb just as Google has become a verb in many English-speaking countries.Afterpay yesterday launched its new cross-border service between Australia and New Zealand.It will see Australian and New Zealand Afterpay retailers able to connect with all 2.7 million active customers from both countries.Mr Molnar said the service would take a phased approach and first enable merchants from Australia and New Zealand, who offer the Afterpay service online, followed by the US. “Following a successful trial of Cross Border with a handful of merchants, we are confident that it will add value to our retail partners and open up the opportunity for them to seek and delight new customers from different countries.“Additional benefits to the retailers will include a simple proprietary global payments solution that will also enable funds to be settled in their country of origin, with Afterpay taking away the complexity of foreign exchange.“Customers will be able to pay directly in their currency and not be hit with any additional foreign exchange fees after the payment is processed.”Turning to the Senate inquiry that put the spotlight on Afterpay and other “buy now pay later” providers, Mr Molnar said the company’s retailers were “rallying” behind the provider and its customers were aware of its value proposition.Last month’s Senate inquiry ultimately took a light touch to regulation into the buy now, pay later space, rather than smashing the industry with onerous and costly national consumer credit protections.“I think it was a great opportunity for us to communicate why we are different.“I think you are always on a path of self-reflection, always on a path of making yourself better, so regardless of the process our purpose for being is to create this product around trust and we always want to make that better.”Mr Molnar said Afterpay, which has a market capitalisation of $4.9bn, was aiming to carry $20bn of transactions in three years but he declined to nominate when the company would make a net profit.In February, shares in Afterpay fell more than 11 per cent when it reported an interim net loss of $22 million after an aggressive and ambitious push into the US and Britain.“We are not going to give forecasts and there are lots of analysts out there who have modelled all this out, but we believe we have a great business that can scale very well into the future and economies of scale will continue to prevail,” Mr Molnar said.
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