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ASOS Invests in Buy Now, Pay Later Solution
ASOS has announced a partnership with Afterpay, giving its Australian customers access to the popular buy now, pay later payment solution.
The online fast-fashion retailer announced the launch of Afterpay on its local website and mobile app on Thursday, giving consumers the option to purchase products through the popular payment scheme, without being subjected to traditional credit checks, upfront fees or interest.
According to ASOS’ Director of Trading, Nicola Thompson, the company’s decision to offer Afterpay as a payment option at the checkout is a natural progression for the business, as it looks to continue improving its shoppers’ online experience.
“We always try to listen to our customers when they ask us for something. Afterpay has been coming up in our customer feedback for some time now and we knew it was important to launch this to ensure our Australian customers continue to have the strongest experience possible when shopping on ASOS,” she said.
ASOS has taken a number of steps in recent months, with the company introducing its Pinterest-style ‘Saved Items: Boards’ feature in October, as well as its ‘Style Match’ mobile shopping functionality earlier in the year. The fashion e-tailer also announced its plans to implement ‘virtual fit’ software on its website back in April, in a bid to reduce the number of preventable returns and improve the experience of everyday shoppers.
The idea is that AR technology will be able to digitally map each piece of clothing that’s available for purchase online, by showing items on models of various sizes.
“We’re experimenting with AR to show products on different size models, so customers can get a better sense of how something might fit their body shape,” ASOS explained in a statement that was released to announce its partnership with Israeli tech start-up, Zeekit.
While ASOS is relatively late to the buy now, pay later party, Thompson is confident the new payment offering will help encourage consumers to finalise their purchases, resulting in lower cart abandonment rates.
Buy Now, Pay Later Controversy
ASOS’ decision to partner with Afterpay comes mere weeks after the future of the fintech start-up was thrown into question, as it became the main subject of an inquiry into the buy now, pay later credit industry.
After months of discussion, the Senate launched an inquiry into buy now, pay later services that aren’t covered by the banking royal commission in mid-October, with Afterpay’s shares dropping 18.93 percent on news of the investigation.
According to Consumer Action Law Centre’s CEO, Gerard Brody, the inquiry into both buy now, pay later services and debt management firms is a welcome decision by the Senate.
“The Senate inquiry is an important initiative and will expose those financial-services providers that have been left free to prey on financially struggling Australians for too long,” Brody said.
Afterpay was quick to recover from its initial price drop, with the company’s shares rebounding when Afterpay released a public statement saying it welcomed the inquiry.
“Afterpay welcomes the opportunity to participate in any review to ensure an informed discussion takes place in an appropriate forum and that the differentiated nature of Afterpay’s service is clearly understood,” the company said.
“Afterpay promotes responsible spending and offers customers a fundamentally different proposition to traditional credit products.
“Our model is unique in that we provide a free service to customers if payments are made on time. We do not charge interest or monthly fees, our instalment periods are short, and if payments aren’t made on time we immediately suspend a customer’s account, which means they will never be caught in revolving debt.”