Afterpay, the “Buy Now, Pay Later” payments solution provider, has rolled out a new loyalty program that incentivizes and rewards Afterpay customers “who pay for their purchases on time and choose to spend responsibly,” the company said adding that “unlike credit card schemes which reward consumers for increasing their spending, Afterpay rewards responsible spending.”
The program, called “Pulse,” is being launched in the U.S. as consumers shy aware from using credit cards and turn to debit cards instead. But there’s no incentives and rewards for shoppers who use debit cards — until now. “By offering Pulse, Afterpay is rewarding consumers for paying in a way they prefer, with their debit cards — while also discouraging the use of expensive loans with interest, fees and revolving and extended debt,” the company said.
Nick Molnar, Co-Founder and U.S. CEO of Afterpay, said “loyalty programs across our industry have encouraged excessive spending — leaving no options for those shoppers who want to spend responsibly and avoid expensive fees and extended debt.”
Here, Molnar explains how Pulse works, how it benefits consumers and retailers, and which this model “is fundamental to our mission and values as a company” by encouraging “financial wellness” while powering an economy “where everyone wins.”
WWD Studios: What was the impetus behind launching Afterpay Pulse? And why now?
Nick Molnar: We recognize that Millennials and Gen Z are increasingly making a conscious choice to use debit cards, yet their responsible decision of spending their own money is not rewarded. In 2020 alone, approximately 90 percent of Afterpay’s global customers have used debit cards to make purchases. By offering Pulse, we’re rewarding consumers for paying in a way they prefer, with their debit cards — while also discouraging the use of expensive loans with interest, fees and revolving and extended debt. Until today, there has been no way for debit card users to earn rewards or benefits for the way they pay.
We built Pulse to fulfill a need and offer a program in which both consumers and retailers benefit. This approach is fundamental to our mission and values as a company to encourage financial wellness and power an economy where everyone wins. Because of this, it was critical that we offer a program that rewards consecutive repayments and not just spending.
WWD Studios: How does the program work exactly?
NM: Pulse incentivizes and rewards Afterpay customers who pay for their purchases on time and choose to spend responsibly. Unlike credit card schemes which reward consumers for increasing their spending, Afterpay is rewarding responsible spending.
Eligible U.S. customers will receive an email inviting them to join the Pulse program. The program will be available in Australia and New Zealand and available in the U.K., where we are known as Clearpay, in the coming months.
WWD Studios: How does a “responsible spending” model like Afterpay Pulse compare to other loyalty programs?
NM: There really isn’t anything out there like this program. The majority of the loyalty programs that exist are based on consumer spending. We really wanted to turn that model on its head, and ensure this program aligned with our core values and principles which focus on financial wellness and responsible spending. You can only qualify for Pulse if you have had extended periods of on-time payments. The program focuses on rewarding consecutive repayments, not just spending.
WWD Studios: What are the benefits of Afterpay Pulse for consumers as well as retailers and brands?
NM: Pulse will give consumers several benefits including: no payment up front on eligible purchases; the ability to shop with 50 top retailers such as Sephora, Macy’s and West Elm, among others, and pay in four interest-free installments; increased payment flexibility for Pulse members; and access to exclusive discounts, promotions and new product launches.
For retailers, Pulse gives them the opportunity to reach the world’s most valuable consumers — highly engaged, high frequency Millennial and Gen Z shoppers who prefer Afterpay and spend responsibly.
WWD Studios: How do you see the COVID-19 pandemic further impacting consumer behavior — especially in regard to how Millennials and Gen Z shoppers spend?
NM: Our data has shown a significant shift to debit over the COVID-19 period, beginning in March — now with 90 percent of consumers electing to use their debit card to pay for their installments. In its most recent SEC filings, Visa reported a sharp decrease in U.S. credit card usage versus debit. U.S. credit-card volumes declined by 21 percent in May year-over-year, while debit card volumes grew 12 percent.
While consumers continue to socially distance we are seeing a continued surge in online shopping. However, as stores begin to open, we’re thrilled that we are now able to offer Afterpay in-stores in the U.S. giving customers the flexibility to shop using Afterpay both online and offline.