E-Commerce Summit: Secret sauce behind Afterpay’s success

Newly minted tech billionaire Anthony Eisen says there is one key thing propelling his company’s unbelievable growth.

Recently minted tech billionaire Anthony Eisen says that trust has been the core tenet propelling his buy now, pay later darling Afterpay to record highs, with the company topping $100 per share and its valuation closing in on a whopping $29 billion.

Speaking at The Australian‘s E-Commerce Summit on Thursday, Afterpay’s co-founder and chief executive Anthony Eisen said that consumer trust and transparency had been the single biggest factor in Afterpay’s high-profile success.

The company has managed to grow from being a small payments provider to now a truly global behemoth, taking on the likes of the US, UK and Asia and becoming a verb, much like tech companies Google or Netflix before it.

“The core innovation, when you strip out technology and all the rest of it, from our perspective, was turning a traditional model on its head,” he said. ”Customers for the first time were given something that was very fair, simple and transparent. It wasn‘t about not having rules. The rules in our system are fairly simple. And they’re all designed about responsibility and not letting customers fall into a debt trap. But within that, and using great technology, and scalable systems, it presents to customers in a very simple and transparent way.

“Our whole idea was not to make money off the customer, you know, it was to provide them with a bona fide a service, and partner with retail. And because we came at that in a different way, because we were pricing trust, not mistrust, the customer reaction that we‘ve had has been amazing. And, you know, that’s what we hold with kid gloves. That’s what drives us every single day.”

Mr Eisen added that Afterpay ‘didn’t have any ulterior motive’ when connecting consumers with retailers, and that customers valued that integrity. As a platform today, because it’s based on, you know, very high trust scores and NPS metrics, it means that we can connect customers to retailers in a really efficient way that makes a difference to retailers at the end of the day, because the things that we’re incubating in our own ecosystem are exactly the way retailers want to connect with customers.

“I think customer trust, and that responsibility aspect, and not changing our stripes, has been really important in our journey.”

Some critics suggest Afterpay’s shares are overpriced, and that buy now, pay later will turn out to be a fad, with hindsight.

Mr Eisen said instead that his business model is part of a lifetime generation shift away from traditional credit products, and that the trends represent the opposite of a flash in the pan.

“Afterpay didn‘t invent that [shift], Afterpay has responded to that trend, which has seen pretty much emerge since the global financial crisis,” he said. ”If anything, I see that accelerate. And I think we’re very well positioned to serve the customer. It’s not just a young thing. It’s not just a millennial thing … The core values that I talk about come from that generation. But we’re not a young service. I mean, the median age of opt to pay now in a in Australia is 34 to 35. And what we’ve seen also is that those trends are emulating overseas as well. So, you know, I do see those trends continuing pretty strongly.

“I think the term buy now pay later is now used very liberally. And very broadly, I think it‘s used to a whole different range of business models, from our perspective, focusing on connecting customers with retail in a responsible way, where consumers don’t fall into debt traps … And if anything, I think that’s got accelerated growth prospects.”

The executive and his co-founder Nick Molnar have faced increased media attention since Afterpay‘s success, and he admitted it hadn’t been easy adjusting to the new-found scrutiny.

“Sometimes it‘s difficult, I won’t lie,” Mr Eisen said. ”Nick and I are relatively private people. And, you know, from our perspective, we’re also pretty risk averse, even though, you know, we’re clearly trying to do a lot of new things and expand globally. We accept that we’re a new form of company. We also accept that, you know, when we came to life, that we didn’t fall neatly into a box. So it’s very important for us to keep communicating our story, not just to customers and merchants that know exactly who we are, but other very important stakeholders in our community.

“I guess what I‘d like to think is that over time, we’re doing that better, where we’re talking, hopefully, always transparently and openly. But we’re trying to share ideas around what our goals and objectives are. And also bring some light to technology and innovation where the skills coming out of Australia are amazing. It’s given us an incredible lease on life to try and compete globally. I think we’re the only consumer facing platform that’s gone in a large scale to the US, as opposed to the other way around. So I think that does come with increased tension, etc.

“So, look, I just hope that, you know, we can continue to focus on what we have to do, but do enough of telling our story, but also listening as well. External stakeholders, media and others can play a really important role and we keep growing through the experience.”