Afterpay ‘Extremely Different’ From Payday Loans: President
Anthony Eisen talks about “The Afterpay Effect” at the Intersekt festival in Melbourne.
As fintechs descended on Melbourne for the three-day Intersekt festival, executive chairman and co-founder of one of Australia’s most successful fintechs, After payment took the stage for the last speech of the first day. His speech centered on trust. Namely, to what extent Afterpay’s success is due to declining consumer confidence in incumbent financial institutions and traditional credit products and how Afterpay has built a strong community of trust with its straightforward product structure .
“I think the Afterpay effect is a demonstration of what can really happen when people in a financial relationship find a way to trust each other,” Eisen said.
However, it was the threat of a regulatory change in the Sector “buy now, pay later” which interested the public. On October 17, the Australian Senate voted to create an inquiry into areas outside the traditional credit landscape. This included payday loans, lease-to-own programs, and buy-it-now and pay-after services such as Afterpay.
The Consumer Action Law Center called some of the debt management service providers included in the review “debt vultures.”
“Debt vultures advertise endlessly online and on television promising a ‘debt free life.’ If you thought looking at the Royal Commission that the banks, insurers, and pension companies scammed us, they don’t have anything about the unregulated industry of debt management, ”said Gerard Brody, CEO of Consumer Action .
However, Eisen welcomes the investigation.
“We don’t think regulation is a bad thing, we think it’s a good thing […] We are very confident in our model and the way we act, but if people enter an industry and cause damage, the regulator should have the right to intervene in it, ”he said. .
As to being lumped together with other credit products in this particular Senate review, Eisen thinks open dialogue is important.
“So we have been very open to this thought process and this approach. The main thing for us is how to have the right approach and the right dialogue so that we can correctly explain why we are different? We’re very different from traditional credit, we’re vastly different from payday loans and other models in the market, but this dialogue is really important, so for us it’s really about communication. “
When asked if he thinks Afterpay will become a credit provider as a result of the review, Eisen said that “the handwriting is not on the wall” everything will be put in one bucket. .
“I think from the discussions we have had with regulators […] that there is an understanding and awareness that some of the fintech innovations – especially those that customers are sensitive to and which are different from traditional models – that one size fits all is not the right approach because there are differences very clearly distinct there. “
But whatever happens in the review, Eisen says there are always areas where Afterpay can be improved for its customers.
“As a company we’ve never said to ourselves ‘we’re fantastic and we can’t do better’. There are always opportunities to improve.”