4% is a very large fee for a payment gateway in businesses that are operating on non-sale margins of between 20-40% (which incidentally is the reality for most product retail in Australia - not sure about offshore). Anecdotally I have had direct experience with Afterpay from the merchant side and it is a very good thing at bringing sales in that you wouldn't otherwise get (basically people buying things they probably can't afford) but when you negotiate a price with a customer where the margin has been squeezed somewhat, it's a very disappointing moment to hear that they want to pay via Afterpay.
Basically I think the way merchants would think about BNPL in general (certainly my thoughts back when I was exposed to it) is that they're more than happy to pay 4% to Afterpay where they get a sale that wouldn't otherwise happen, but once Afterpay starts cannibalizing sales that would otherwise go through via Mastercard or Visa @ circa 0.5-0.75% they become a little less enthusiastic. These numbers might seem insignificant from the customer side, but from the merchant side they add up to significant amounts over the course of a FY.
FWIW I had a retail business (side gig) for quite a few years - one thing I can say is that retail is a brutal business to be exposed to these days - margins are wafer thin and costs are always in focus.
APT Price at posting:
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