Clearpay UK

Afterpay Touch Group, the digital payments provider allowing people to pay in instalments free of charge on their debit cards, has made its first move into Europe with backing from global retail partners.

Afterpay Touch Group, which launched just four years ago, now partners with over 30,000 merchants and offers a wholly new, interest-free, debit-by-instalment service to customers.

Over 4 million people are now using Afterpay in the US, Australia and New Zealand. The company is now introducing the same service to the UK under the Clearpay brand.

UK Third-Largest Global eCommerce Market

The UK is the third-largest global market for eCommerce after China and the US, worth over £70 billion annually. This is more than four times the size of the Australian market, where one in four young people now use Afterpay and the company accounts for 10% of all eCommerce.

Global retail brands partnering with Afterpay in Australia and the US are lining up in the UK behind Clearpay. Urban Outfitters is already offering Clearpay to online customers of Urban Outfitters, Anthropologie and Free People in the UK.

Boohoo Group has also confirmed plans to launch Clearpay across all its UK brands and websites, thereby extending its Afterpay partnership in Australia, New Zealand and the US to Europe.

Clearpay is separately in advanced discussion with a host of other leading UK retail brands. Retailers already using Afterpay in Australia and the US include The Iconic, Asos, Forever 21, Revolve, Kylie Cosmetics and Steve Madden – many reporting significant reductions in their returns as a result of using the Afterpay service.

“Afterpay purchases see the lowest return rates of all our supported payment types in the US.”

David Hayne, Group Chief Digital Officer at Urban Outfitters Inc.

Clearpay expects this to be the same in the UK. UK CEO Carl Scheible, who joined Afterpay Touch to oversee its expansion across Europe, previously took PayPal from a start up to a billion-dollar company in the region.

Clearpay Reduces Returns

Scheible said Clearpay’s service is completely unlike existing pay by instalment services, and has proven success reducing returns.

“Retailers across the US and Australia tell us that using this service drives down their
returns, typically by around 20%, and attracts new customers online…This is about putting the customer first and, by virtue of that, facilitating mutually beneficial and higher value connections between retailers and their customers.”

“The Clearpay platform is unlike anything on offer in the UK, offering people greater flexibility to budget and pay for goods and services…By trusting consumers to repay free of charge, it turns accepted wisdom in financial services on its head.”

“This is an interest-free way to stagger payments by debit, which rewards positive behaviour and is the opposite of a traditional credit product. Instead of making money by trapping people in accruing debt, Clearpay charges retailers a fee to provide the service and covers the cost of the purchase up front, removing the risk for the retailer”

Carl Scheible, Afterpay Touch, UK CEO

The Afterpay Touch platform has expanded rapidly on the back of a trend away from credit cards, especially among Millennials, with 85% of younger users opting to link a debit card to their account. Millennials now make up 27% of the global population and by 2020 will have the highest spending power at nearly £8 trillion worldwide.

Afterpay Touch Launched in Australia

Afterpay Touch has experienced exponential growth since its launch in Australia in 2015 and subsequent entry into the US in 2018, responding to a generational shift away from
traditional credit products. The company, which listed on the Australian Stock Exchange in May 2016, is now valued at over £3 billion and processes over £2 billion in online purchases.

“Young people are looking for new ways to pay which resonate with the beliefs, attitudes and acceptance of new technology that characterises their generation…It has long been predicted that payment systems will revolutionise the provision of financial services – and we believe this is it.”

Carl Scheible, Afterpay Touch, UK CEO

Research by YouGov for Clearpay, to be published shortly in a report on changing attitudes to money, reveals that young people in the UK share the aversion to debt and credit that has driven the growth of Afterpay elsewhere. YouGov found that only 51% of younger people even own a credit card and most strongly prefer debit for payments under £500.

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