If you’ll forgive the lament of a bean counter, it’s a shame that our success at the Olympics overshadowed our much rarer and more valuable business success, when two young Australian entrepreneurs sold their business, Afterpay, to the American giant of the fintech, Square, owned by Twitter co-founder Jack Dorsey, for $ 39 billion, making it our largest business acquisition to date. Oh the honor, the glory, the gratitude for poor little Australia!
Yes, I put it a little thick. It’s definitely a big deal but, as my mom used to say, I’m not sure how happy we should be to see Afterpay and its ilk inflicted on our own young people, let alone young people all over the world. .
But welcome to the mysterious world of “fintech” – the application of the Internet and digital technology to the once boring world of paying for things, borrowing money and moving it.
We are seeing the migration to online retail, we’ve seen Uber shake – or shake – the taxi industry, seen Airbnb do on the hospitality industry, seen the digital disruption of media moguls, and now it’s all about it. is the turn of the banks in the line of fire.
All of these innovations have taken off because, whatever they have done for the careers and livelihoods of people working in the industries concerned, they have brought benefits – often simply greater convenience – that consumers find attractive.
Global tech behemoths – especially Apple, with its Apple Pay – are moving into banking territory, while a host of startups are considering new ways to deliver a financial service that banks don’t. . The big banks are unlikely to agree to this, but so far they haven’t done much.
This is where Afterpay comes in. In 2014, Nick Molnar and Anthony Eisen proposed a new way of approaching BNPL: buy now, pay later; do with – without having to pay interest. You buy something from a retailer – usually for a small fee, say $ 1,000 or less – and then pay the purchase price in four equal installments every fortnight.
That’s it. Nothing more to pay. Unlike the old practice of buying things on the lay-by, with BNPL you get your hands on the purchase at the start, not at the end.