Afterpay marketing costs double in bid to secure US payments market
Australian transactions firm Afterpay has watched its losses widen in the past year, as it ramped up costs in a bid to secure the US market.
Marketing costs more than doubled in the year to June, as the firm attempted to capitalise on the pandemic-induced buy now, pay later (BNPL) services boom – which accompanied a surge in online shopping.
Statutory losses swelled to A$159.4m from A$22.9m the year prior.
However, Afterpay is set to be hoisted up with a whopping $29bn buyout from Twitter co-founder Jack Dorsey’s US rival Square.
Dorsey, who confirmed the merger at the beginning of the month, said that the payments firms have a “shared purpose”.
The deal signals that the BNPL business, where shoppers can buy whatever they want by gradually paying off small point-of-sale loans in interest-free instalments which bypass credit checks, will not be going anywhere anytime soon.
Afterpay’s founders, Anthony Eisen and Nick Molnar, are also looking at a payday of around £1.3bn each once the deal closes, with regulatory approval pending.
Despite the costs, the firm’s marketing move had tipped a sales uplift, where the value of transactions facilitated hit A$21.1bn.