The Afterpay of New Zealand is expanding to Australia.
Laybuy, a buy now pay later (BNPL) platform started by Kiwi retail veteran Gary Rohloff, who previously led Warehouse Stationery and EziBuy, and his son Alex, officially launched in Australia on Friday.
With a new head office in Sydney and more than 1200 Australian retailers already signed up, Laybuy is looking to establish a foothold in the increasingly competitive BNPL market.
The BNPL concept, which enables consumers to split the cost of an item into several interest-free instalments, first emerged with the launch of Afterpay in 2015. Since then, a slew of fintech companies have introduced their own versions of this modern-day form of lay-by.
Besides Afterpay, some of the bigger BNPL players in Australia today include zipPay, Openpay and Humm. Meanwhile, payment giants, including Visa and Citi, have launched instalment payment options, and some retailers, such as MySale, have developed BNPL products in-house.
Just last week, consumer finance company Latitude Financial Services threw its hat into the ring with the launch of a new BNPL platform, Latitude Pay, at Harvey Norman.
The company, led by former Australia Post CEO Ahmed Fahour, has pitched its product as being more merchant-friendly than other platforms. It doesn’t charge any merchant service fees for transactions under $250, and says its fees for transactions between $250 and $1000 are “segment leading”.
The Australian Financial Review reported Latitude’s fees as being around 2 per cent of the cost of goods, compared to the 5 per cent Afterpay charges for mostly small purchases.
Cost of BNPL in the spotlight
Until recently, many retailers believed – or hoped – that the uplift in sales from offering BNPL at checkout would offset the margin they lost on fees. But as consumer uptake rises, the cost of BNPL is increasingly coming under scrutiny.
“When we talk to Aussie retailers the first two questions we are asked are ‘are you cheaper?’ and ‘will it easily integrate with our existing system?’,
and the answer is simple – yes,” Rohloff told Inside Retail.
While Rohloff declined to say what it would cost a retailer to offer Laybuy, he said the platform is “generally cheaper than the other providers”, and noted that it doesn’t charge additional transaction fees. He likes to refer to Laybuy as being “by retailers, for retailers”.
The platform, which officially launched in New Zealand in 2017, is currently used by more than 500,000 Kiwi customers. It entered the UK in March, with retailers including FootAsylum and Alexachung on board, and plans to enter Europe and the US after Australia.
Laybuy said it has 1200 Australian merchants on board, including fashion chain Ally Fashion, footwear brand Senso, fitness brand Muscle Nation and Australasian retailer Glassons.
The platform enables merchants to easily sell to customers in all the markets it operates in via its Laybuy Global feature.