If you want to know the different ways Afterpay makes money, you will find this article very helpful.

It reveals exactly how Afterpay makes money, including some that you may not be aware of.



One of the appealing factors of eating in a restaurant is that you are provided a menu.

The menu is a reflection of all of the meals that the cooking staff can prepare.

First, this company has paid $25+ million to members:

SurveyJunkie (only USA, Canada, Australia residents allowed). You can earn money sharing your thoughts. They have already paid $25+ million to their 20+ million members just for sharing their thoughts and opinions. Click here to join SurveyJunkie for FREE

Generally offered are a wide variety of foods available to eat that match the tastes and cravings of their customers.

Variety is good.

Variety is also important in the financial world and purchasing options are being further extended as customers are offered additional purchasing opportunities.

Those options on the financial menu include the ability of the customer to pay cash, use a debit card, use a prepaid credit card, a credit card, and buy now and pay later.

It is this buy now and pay later option that seems to have been revitalized and is now becoming a significant option for customers to make their purchases.

One such company and service that provides this buy now and pay later option is Afterpay.

Let us look at this financial menu item.


What Is Afterpay?

Afterpay is a way of purchasing items from a retailer where the individual buys now and pays later.

The major difference between this system and a regular debit or credit card is that the payments for the item(s) purchased are spread out over four payments.


How It Works

The initial purchase is made at the time of the sale and the remaining three installments are paid every two weeks.

Therefore, the second payment would be paid the second week following the initial purchase, two weeks later the third payment, and then two weeks later the fourth and final payment.

The account is tied or linked to a debit or credit card and the amounts, at the time of the installment payment, are taken from either the debit or credit card.



There are five eligibility requirements for an individual to open up an Afterpay account.

The first requirement is that they are a resident within the United States or the District of Columbia.

The second requirement is that they are at least eighteen years old or in the case of residing in Alabama where the individual must be nineteen years of age.

The third requirement is that the individual can legally enter into a binding contract between themselves and Afterpay.

The fourth eligibility requirement is that the individual has an email address and a mobile cellular phone number.

As part of the eligibility requirements, the individual must have a mailing address in the United States.

Finally, the eligible individual will be able to present a credit or debit card in order to link that card with their Afterpay account.


Who Accepts Afterpay? 

Embedded within the Afterpay website there are a number of companies that can be accessed that utilize the Afterpay payment option.

Some of those retailers include Kmart, Target, Footlocker, Sephora, Reebok, Converse, to name a few.


Afterpay App 

The Afterpay app can be downloaded for Android or iOS platforms.

The app not only facilitates the customer’s ability to shop, but also provides the customer access to their account to show when the dates of payment are due as well as the transactions that have been accomplished.

This app also lists a variety of shopping sites that an individual can shop at.



At Afterpay the individual has the opportunity to go to the online site which hosts a variety of retailers and vendors.

By accessing the website the individual can conduct their shopping and use their purchasing power through this buy now and pay later process.



In addition to shopping online on the Afterpay website, there are some stores that provide this opportunity to buy items in their brick-and-mortar locations.

The Afterpay subscriber simply uses their Afterpay app to set up an Afterpay card.

In turn, this card is used when the individual has completed their shopping and is checking out.

The card should be added to your Apple Wallet or Google Wallet.

When you are ready to check out at the store open up your Afterpay app and select the card tab.

This will reflect the amount that you have available to spend.

When ready to proceed then just tap the pay in-store option utilizing your Apple Pay or Google Pay.

Holding your device at the card reader at the register you should be notified that the purchase was successful.

If all goes according to plan you will see a confirmation that the transaction has been completed.

You then have the ability to pay for your purchase over four payments.



How Does Afterpay Make Money


Fees From Merchants 

One of the primary ways that Afterpay makes money is that they assess fees to retailers.

Those stores that partner with Afterpay and facilitate a sale to a customer that utilizes this buy now and pay later option are charged for each transaction that is made.

This payment is facilitated and captured through their payment gateway.

Each time a customer makes a purchase through Afterpay, the merchant is charged a 30% flat fee on each of those transactions.

Additionally, the merchants pay a fee that can range anywhere from 4% to 6%.

This percentage is based upon the value and the amount that the merchant is able to sell to the customer.

And so, the business model is that the more that the merchant sells the lower are their associated fees

The benefit to the retailer and allowing this partnership to move forward is that Afterpay takes on all of the risks as it relates to any outstanding balances owed by the customer.

Also, Afterpay advertises to the merchants that this type of payment option offered to a customer will help to increase their store sales ranging anywhere from 10% to 20%.

Additionally, there are fewer returns by Afterpay customers which will reduce additional costs incurred by the merchant for restocking.

Again, this company has paid $25+ million to members:

SurveyJunkie (only USA, Canada, Australia residents allowed). You can earn money sharing your thoughts. They have already paid $25+ million to their 20+ million members just for sharing their thoughts and opinions. Click here to join SurveyJunkie for FREE


Late Fees 

The other revenue stream that Afterpay realizes is late fees for those customers who do not meet the terms of repayment with their outstanding balances.

The customer is fully aware of their payment dates as it is reflected in the invoicing process.

If the customer is late, Afterpay will try to automatically deduct the installment from the customer’s debit or credit card.

The fee charged to a customer paying late is ten dollars and an additional $7.00 charge is assessed if the invoice remains unsatisfied following seven days after the initial late fee has been assessed.

Late fees for balances of forty dollars or below are capped out at ten dollars.

However, if the customer’s balance is over $40 then up to $68 can be assessed.


Click Advertising 

With Afterpay being a purchasing-driven process, in August 2021, Afterpay introduced into their app the option for advertisers to advertise.

This advertising allows these various retailers to promote their own deals.

This cost per click process and revenue for Afterpay is realized if the Afterpay customer clicks on one of the promotions.

A small fee is then captured by Afterpay for this additional opportunity for advertisers to promote their products.



The final stream of revenue that is realized by Afterpay is through its subsidiaries that are located in other countries.

One of those subsidiaries is a company by the name of Clear Pay which has its operational base in the United Kingdom.


After Thoughts About Afterpay


The Power of No

Afterpay for shoppers exhibits the power of no.

In particular, with Afterpay there is no credit check.

They don’t pull your credit report to find out about your credit history and to see what balances you may or may not have or your history of payment.

Also, Afterpay says no when it comes to interest.

Although there are fees associated with an individual not fulfilling their part of the agreement, there is no interest paid on any outstanding balances.

Additionally, Afterpay is the option of buying now and paying later with no fees attached for this service.


Increasing Your Credit Limit 

After a period of time and through the use of Afterpay, the customer may realize an increase in their credit limit.

Consideration of increasing the credit limit is based on their responsible use of this service and ensuring that their payments are timely as well as paying the amount agreed upon.



If an Afterpay customer does not fulfill the terms of the agreement and defaults on the payment, then Afterpay reserves the right to begin charging interest payments on the balance of the amount owed.

Eventually, if the customer continues to be in non-compliance, then Afterpay may give that account to a company that tries to collect on defaulted accounts.

Also See: Nike Product Testing & Landlord Overcharging Utilities.


Paying Afterpay 

There are two payment options provided by Afterpay to facilitate payments by the customer to this buy now and pay later site.

The first way is through an automatic system.

The process can be set up by either going to your app or going online and entering your preference as it relates to payment.

You can add a payment method in the section entitled my account and look for the billing section.

The amount of the payment is automatically deducted from either your debit card or your credit card and generally, as a courtesy, Afterpay generates an email to let you know when the payment will be due.

The other option for the paying customer is to make the payment manually by going to the app or logging online into your account and making the payment transaction happen manually.

Also, there is an option where you can have your card stored for future payments.


Personal Story

Perhaps you can relate to my recent shopping encounter.

I was at the grocery store and the total amount of the groceries came to forty dollars and change.

I opened up my wallet and there were a few credit cards, a debit card, and no cash.

At the moment I was faced with the question of how I wanted to pay for the groceries.

I had a number of options.

I did not have the option of paying for cash because I had no cash.

The second option was to use my debit card and I quickly went over what my bank balance was, what bills were coming due, and whether that would be a viable option.

Then as I looked at the credit cards, I wondered which one would be best in the light of what sort of rewards were offered, if there were any particular points associated with grocery shopping, etc.

Long story short is I chose to pay with a credit card.

However, the real bottom line is that I had options and most likely you do as well.

One other option that is presenting itself is the recent purchasing opportunity of buy now and pay later through a variety of companies that offer this particular option.

So after paying for my groceries let us look at Afterpay.


How Afterpay Makes Money FAQs


What Is the Borrowing Limit With an Afterpay Account?

Typically when you are approved with Afterpay your purchase limit is a hundred and fifty dollars.

As your financial history and successful repayment continue with Afterpay, you will most likely experience incremental increases in your buying limit.

The maximum amount that Afterpay will allow to be carried on their system is $2,500 per customer.


Is It Safe to Use Your Debit Card With Afterpay?


This affirmative answer is based on the reality that Afterpay protects an individual’s personal data and uses a recognized compliant service provider in ensuring that the financial information of their customers is secure.

The platform that they use is PCI DSS Level I.



We are confronted with questions and situations where we are required to make a decision.

Our financial lives and finances are no different.

We are afforded a number of options.

Those options are to not buy, defer buying, pay in cash, use a debit or credit card and buy now and pay later.

It’s always good to have options.

Again, this company has paid $25+ million to members:

SurveyJunkie (only USA, Canada, Australia residents allowed). You can earn money sharing your thoughts. They have already paid $25+ million to their 20+ million members just for sharing their thoughts and opinions. Click here to join SurveyJunkie for FREE

Previous article25 Best Money Saving Apps For Android and iPhone
Next articleHow Does Apartments.com Make Money?
Apart from being a seasoned Personal Finance expert who has written for top publications around the world, I bring significant personal financial experience. Long story short... through bad financial choices... I found myself $100,000 plus in debt. I was able to dissolve this indebtedness and regain financial solvency. This financial turn around was accomplished through reading, studying and implementing a financial plan. My financial plan included paying down my debt through budgeting, being cognizant of where my financial resources were being spent, changing my attitude about money and understanding the binding chains of the improper use of credit. Today, and for 10 years, I have been debt free and have invested wisely to enjoy my current retirement. This is allowing me to write to help others make, save and grow money wisely!