Afterpay moves into pay-now-travel-later in attempt to cash in on worldly millennials
Afterpay has inked a deal that will see it move into a new vertical, offering millennials pay-now-travel-later holiday options.
Fresh from a Senate probe into the buy-now-pay-later sector, market leader Afterpay has announced a move into the travel space that flips the script on its core business model.
The new platform, called PLAY, is the result of a deal with holiday layby business Layaway and is, in essence, a pay-now-travel-later service.
Customers pay for their holidays in a series of interest-free instalments prior to their departure date.
The rationale is simple: millennials like to travel, and Afterpay has lots of millennial customers.
Afterpay Group head David Hancock said there’s a market of 11 million international trips a year the business can sink its teeth into.
“Taking the Australian passion and hunger for travel into account, what we’ve endeavoured to do with PLAY is to create high-quality, well-thought-out packages to provide experiences they may never have had before, but also manage payment in a way that is responsible,” Hancock said in a statement circulated on Wednesday.
Trips to the Whitsundays and Fiji are already up on the platform, with options for payments made over a two-to-12 month period.
Fee wise, missing a scheduled payment will cost customers a $7 administration fee (capped to $35), while missing more than five payments will suspend an account.
Cancelled holidays will draw a $55 fee, and a financial hardship program has been put in place, similar to through Afterpay.
The fast-growing buy-now-pay-later businses is walking a carefully constructed line with the new venture after experiencing scrutiny in recent months.
A Senate inquiry into buy-now-pay-later operators earlier this year did not recommend extending consumer credit protections to Afterpay and competitor Zip, but ASIC has been given new powers to intervene in the emerging industry.
NOW READ: Afterpay, Zip escape buy-now-pay-later crackdown but stricter regulation is on the way
NOW READ: Afterpay, Zip under microscope: ASIC supports further buy-now-pay-later regulation
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