Through this latest partnership, travelers can finance their purchases by making four no-interest payments across six weeks. The launch comes as other services say they are seeing record demand for BNPL for travel purchases and as travelers becoming increasingly budget-conscious.
According to Modern Retail, Alex Fisher, Afterpay’s head of revenue for North America, said Expedia is the largest travel business to partner with Afterpay to date. Previously, it’s been used for flights, hotels, and tourist attractions in Australia, as well as several hotels and travel options in the US. ‘We’ve seen the demand to have travel partners in the U.S. just grow dramatically as Buy Now Pay Later has just taken off in the market,’ Fisher added.
Currently, electronics, apparel and furniture are the top areas for BNPL spending, according to a July 2022 study from the Motley Fool quoted by Modern Retail.
The timing of the launch reportedly comes as budget-conscious consumers are looking for new financing options: Travel market research company Destination Analysts, found that 54% of Americans consider travel a priority, a 10-month low compared to previous percentages. In turn, Afterpay’s Alex Fisher indicate that the usage of BNPL for travel could increase: ‘I think there’s a broad understanding of the macro environment and the impact of that on consumers and their wallets,’ Fisher said.
According to an analysis from Australian publication Financial Review, Afterpay reportedly introduced credit checks on new customers to ensure they can afford to repay its loans. As it was contextualised by AFR, since it began its activity, Afterpay’s policy stood against assessing customers’ financial capacity upfront. Rather, its system takes on customers without credit checking and then determines, based on spending and repayment behaviour on the platform, whether to extend initially low credit limits.
However, at the beginning of November 2022, it was reported that Treasury is preparing to release an options paper that will consult on models for regulation of the Buy Now, Pay Later sector, as flagged by the Minister for Financial Services Stephen Jones in July.
Afterpay is said to beginning credit checking US users, after amending its systems to let them look at credit scores held by credit bureaus during the application process.
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