More than 1.1 million customers now use Afterpay, what is Afterpay?

Petrina Berry
(Australian Associated Press)

Lay-by payments service Afterpay Touch says its underlying annualised sales are on track to surpass $1.5 billion as more major brands sign up.

The fintech’s first quarter sales hit $367 million, up from $271 million in the fourth quarter of 2016/17, and comes after Target, Luxottica and Petbarn recently adopted its online payments system.

Shares in Afterpay jumped 48 cents, or 10.2 per cent, to $5.18 on the company’s quarterly sales update.

Afterpay says more than 8,600 merchants are now on board, up from about 6,000 on June 30.

And more brands are expected to join up in the second quarter.

“Significant development of partnership and platform initiatives in the first quarter of the 2018 financial year are expected to enhance Afterpay’s future growth and profitability,” the company said in a statement.

Afterpay pays the retailer for a purchase, and the customer pays fortnightly instalments to Afterpay, with the benefit of no interest payments or up-front fees, over a maximum of 56 days.

Late fees are incurred if payments are missed, however the company maintains that the majority of its revenue comes from retailers, and it is in the interest of the company to have customers who pay on time.

More than 1.1 million customers now use the service, up from 841,000 at June 30, and new customers continue to grow at an average of more than 3,000 per day.

Afterpay has also spread to travel after Jetstar began a trial of the platform for domestic bookings in September.

The company is keen on expanding its use from company’s websites to in-store.

It said it is confident that Afterpay’s in-store footprint will at least triple in size to well over 4,000 shop fronts before the peak Christmas trading period.

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