“Buy Now Pay Later” solutions are the future for e-commerce and shopping in physical stores. Clearpay, also known as Afterpay outside of Europe, is a solution that is reaching increasing success. Federica Ronchi, country manager Italy, explained how the company is operating in Italy and how it aims too expand further internationally in Europe and beyond.
Clearpay, known as Afterpay outside Europe, is a Buy Now Pay Later solution that allows customers to shop online and pay in installments, always with zero interest and no hidden costs. Founded in Australia in 2014 as Afterpay, in 2021, Clearpay simultaneously entered Italy, France, and Spain. We also have a presence in Canada and New Zealand.
Despite the still limited uptake of Buy Now Pay Later (BNPL) in Italy, as well as in many other European countries, Clearpay already has more than 2.5 million active customers in Europe, more than 7 thousand merchants, and a gross merchandising value of more than $1.9 billion in FY2021. Globally, to date we have over 19 million active customers, more than 140 thousand merchants and 1,200 employees across Australia, North America, Asia and EMEA.
A survey conducted in collaboration with Human Highway in March 2022 on a sample of 1,036 Italians who shop online showed that although BNPL is still a little-known service in Italy, as many as 56.1% among those who do not know it would like to learn more about it.
Clearpay is committed to offering local and global merchants access to an active customer base of more than 20 million. This base will continue to grow in Europe and abroad with further integration into the Block ecosystem.
The Square system, on the other hand, is currently present in Spain and France, as is Clearpay, with multiple mutual benefits for customers and merchants.
Specifically, Clearpay allows Square to acquire new sellers, moving upmarket and enabling Square sellers to attract new buyers and increase revenue.
The Square/Cash app brings a large and growing customer base to Clearpay that will accelerate our reach and the ability to extend our offering to more vertical industries. In addition, the app enables new features and services for both merchants and consumers (Cash App, SME loans, POS services, back-end services, debit products, and others) and the ability to extend our mission and enable more consumers to access a new way of paying that encourages financial awareness and responsible spending.
While the integration between Clearpay and Square will bring important synergies, from a BNPL perspective Clearpay will be totally focused on acquiring a new merchant base in the European landscape in our core verticals, such as fashion, beauty, and home furnishings.
How does Clearpay differ from similar existing tools in the market?
The BNPL offers consumers the possibility of deferring payment over time, dividing the total expense into three installments with a predetermined amount and maturity, without interest or additional costs and with all the convenience of a debit that occurs automatically every 30 days, in the case of Clearpay.
This kind of payment thus allows for "buying now and paying later" and provides consumers with more freedom in their purchases and is an ideal tool for keeping their spending under control, especially for the younger generation.
The Human Highway research I mentioned earlier shows that the ability to defer payments over time is associated with a feeling of convenience for 52.5% of the sample surveyed, flexibility (46.6%), freedom (39.6%), possibility (37%), and careful financial management (9.5%).
Clearpay is transforming the way people pay, allowing customers to buy products immediately and pay for their purchases in installments, without interest. The service is completely free for customers who pay on time, thus encouraging responsible spending without incurring interest, fees or long-term debt. Payment is made in three installments: the first is settled at the time of order, the second after 30 days, and the third after 60 days, at no additional cost.
Installment payments also allow the consumer not to commit to the monthly credit limit, thus allowing them to have access to the products and services they need and want, increase average transaction volumes, or make purchases at the end of the month, when they are usually instead used to having to wait until the beginning of the next month for purchases.
What are the benefits for companies and brands?
Clearpay is a solution designed for companies of all sizes: it targets not only large brands, but also local businesses and startups, which may need to increase their visibility online.
Clearpay works as a "marketing engine": it generates on average a +22% increase in conversion rate and +30% increase in the average ticket, reduces the cart abandonment rate, leading to greater customer loyalty and a reduction in their return rates. In this way, Clearpay brings in highly qualified organic traffic inclined toward repeat purchases that goes to increase the merchant's customer base.
Clearpay's goal is to grow partner business through the use of the solution, thereby supporting the local operations of the countries in which it operates.Clearpay in fact wants to position itself as a crossroads between consumers and businesses, declaring itself "merchant centric."
Clearpay is compatible with any e-commerce platform and relieves partners of any risk, guaranteeing them immediate collection of each sale. Confirming that Clearpay is truly committed to promoting responsible purchasing, any customer who delays a payment will not be able to use the service again until the payment is settled.
Will Clearpay launch new services?
To make shopping even more user friendly, Clearpay recently introduced the new app, which allows users to have mobile access to all brands that have integrated Clearpay as a payment system.
To meet everyone's needs, the app already features an internal breakdown of brands into different categories: fashion, beauty, sports and leisure, home decor, and childrenswear.
What are Clearpay’s future goals?
A year after our arrival in Italy, Clearpay has grown in the market and we have seen a strong and increasing interest-especially from the younger generation-in more flexible payment methods that do not involve additional costs and that make purchases more sustainable and simple.
The work we have initiated with our partners over the past year, along with the recent launch of the app, have laid the groundwork for the further development of Clearpay in Italy, with the goal of offering consumers even more freedom in their purchases thanks to an ideal tool for keeping their spending under control, especially for the younger generation.
In the near future we want to introduce BNPL and our service to more merchants and consumers, and during 2023 we also plan to introduce our in-store solution, which is already available in the US, Australia and the UK.
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