Rivals overtake Afterpay in race for US customers

Afterpay – the buy now, pay later group soon to be acquired by American giant Block – is falling behind in the race for new customers in the US, analysts say.

Afterpay’s office in Sydney. Picture: NCA NewsWire / Nikki Short

Afterpay – the buy now, pay later group soon to be acquired by American giant Block – is falling behind in the race for new customers in the United States compared with its key rivals Klarna and Affirm, according to equities analysts at Morgan Stanley.

The investment bank was the financial adviser to Block, previously known as Square, during the acquisition of Afterpay.

Morgan Stanley analyst Andrei Stadnik said Afterpay downloads in the US had continued to maintain a record level in December 2021, “but its growth slowed to 10 per cent (year on year) from 130 per cent (year on year) in December 2020”.

“Meanwhile, BNPL peer Affirm recorded 90 per cent downloads year on year, surpassing Afterpay”.

Affirm had only recorded a 35 per cent growth in the prior period, the data shows.

Meanwhile app downloads for Klarna, another major competitor, rose 70 per cent, although this was also lower than the 120 per cent recorded in December 2020.

Block is waiting on approvals from the Bank of Spain to finalise its acquisition of Afterpay.