JD Sports, Urban Outfitters and Boohoo among 50 brands to adopt Clearpay in UK
JD Sports, Urban Outfitters, Boohoo and Smiggle are among 50 UK fashion brands and retailers to have adopted Clearpay, just weeks after the online payments service was launched in the UK by Afterpay Touch Group.
Afterpay Touch Group entered the UK under the Clearpay brand earlier this month with its new, interest-free, debit-by-instalment service. Internationally, Afterpay is a market leader in this type of online payments, with more than 4m people now using it across the US, Australia, New Zealand and now the UK.
The company has also now rolled out its online store directory to the UK market. Already used by consumers in both Australia and the US to find fashion items, Afterpay’s store directory claims to be driving up to 5m new, younger, customers to online retailers featured on its platform.
“Afterpay’s global fashion and retail partners are keen to offer our service to their customers in the UK and Europe because of the benefits they’ve seen elsewhere,” said UK CEO Carl Scheible, a former executive of Paypal.
“Return rates, in particular, are a big issue for UK retailers and we stand out as a partner with proven success in helping to drive returns down, whilst also attracting new customers.”
“Retailers across the US and Australia tell us that using this service drives down their returns, typically by around 20%, and attracts new customers online,” added Scheible. "This is about putting the customer first and, by virtue of that, facilitating mutually beneficial and higher value connections between retailers and their customers.”
Clearpay charges retailers a fee to provide the service and covers the cost of the purchase up front. It is a free debit-by-instalment service for consumers, cutting the purchase cost into four equal instalments over two months – with no interest added.
Afterpay Touch Group was founded in 2015 in Australia and floated on the Australian Securities Exchange in May 2016. The company is now valued at over £3bn and processes over £2bn in online purchases. Last year Afterpay Touch acquired Clearpay Finance Ltd, a UK payments company, to accelerate its entry to the UK market.
The company said it has grown on the declining use of credit cards, particularly among the millennial consumer market, with around 80% of younger users opting to link a debit card to their account.
Clearpay is one of a raft of new payments providers to enter the market offering alternative forms of credit to younger online shoppers in particular.
Swedish bank Klarna offers customers (both in-store and online) the change to buy now and pay in 30 days' time or split their payments into three instalments. Brand such as ASOS, Arcadia, Missguided, QUIZ and Moss Bros have adopted the service in the UK, and it has received the backing of global fashion giant H&M with whom it is rolling out its service globally.
Another new entrant in the UK market is Laybuy, which hails from New Zealand. Its service was launched in the UK with Footasylum and allows consumers to purchase an item by only paying a sixth of its cost upfront and paying the rest in equal weekly instalments with no financial penalty for doing so. To qualify consumers must undergo a credit check by Experian after which they are given a spending limit of between £60 and £720. If customers wish to spend more they can put in the difference in cash and customers who fall behind on payments will have their accounts frozen.