Dive Brief:
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Last week, Afterpay, a digital payment platform which offers interest-free payment plans for online and in-store purchases, announced its partnership with several U.S. retailers, including Levi's, Ray-Ban, O'Neill and Tarte Cosmetics, among others, according to a company statement.
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These brands join the company's stable of notable U.S. retailers and brands, including DSW, Forever 21, Rebecca Minkoff, Skechers, Steve Madden, True Religion and other brands that are "beloved by millennials," the company said. The company boasts 1.5 million U.S. customers, and partnerships with more than 3,300 retailers since it launched in the U.S. last year.
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The addition of these partners comes as the company works to expand its U.S. growth. The company is developing influencer programs with its current partners, and in March it collaborated with Forever 21 in celebration of International Women's Day.
Dive Insight:
Retailers are offering these alternative payments options at a time when millennial and Gen Z consumers are shifting their payments habits. Millennials have a spending power of about $200 billion, but fewer of them use credit cards than previous generations. And even when they apply for store credit cards, research has shown that they are more likely to be denied.
Despite their shaky relationship with credit cards, which is understandable given that millennials and Gen Z shoppers came of age after the Great Recession, these generations are leading the adoption of digital payments tools. As millennials and Gen Z consumers are navigating their complicated relationships with credit cards, companies like Afterpay and Venmo are looking to offer alternative payment plans.
"As more millennials and Gen Zers shop for brands ranging from American icons like Levi's, Ray-Ban, Jeffree Star Cosmetics and O'Neill to younger, category-shaking brands like Tarte Cosmetics, they are showing how important it is to them to be able to manage their budgets responsibly and never be caught off guard by surprise interest payments or fees," Nick Molnar, CEO and co-founder of Afterpay, said in a statement.
