AfterPay Basics

1. Introduction

AfterPay is a payment-after-delivery service developed by Arvato Financial Solutions to enable omnichannel businesses to offer shoppers a convenient way of separating checkout from the actual payment. This is typically attractive for consumers on the go, frequent shoppers and consumers who want to first experience the goods before paying.

At its core, AfterPay offers an invoice that is open to being paid within 14 days. AfterPay also supports part payment options to support merchants with sales financing and consumers with the possibility of evening out their expenditure.

AfterPay covers the risk of consumers not paying, thus eliminating credit and fraud risk for merchants. AfterPay settles the invoice amount to the merchants independent of when consumers pay their invoice.

2. Product Overview

More shoppers than ever before shop on their mobile devices, and making the checkout experience as easy as possible continues to be a top priority. Pay-after-delivery services facilitate just that and allow shoppers to separate the checkout from the execution of the actual payment.

AfterPay gives shoppers the freedom to pay whenever and however they find it most convenient. AfterPay consists of two fundamental payment alternatives: invoice and part payment. Each alternative offers various options, as illustrated below.

General AfterPay payment structure. Ivoice (14 day invoice, Campaign invoice, Consolidated invoice) and Part payment (Fixed installment, Flex payment)
Figure 1 - AfterPay payment structure

The merchant can choose when the options, as well as which options, are available during the checkout process. The shopper can also switch an invoice to a part payment scheme after the purchase has been made. A more detailed explanation of how to display the different payment options can be found in our Checkout Guidelines.

2.1 Invoice

Shoppers who chose AfterPay’s invoice are subject to predefined payment terms to pay the invoice and shall pay the full purchase amount on the invoice due date. The due date is always calculated based on the dispatch date of the goods, not the purchase date.

2.1.1. 14-day invoice

The most common terms of payment are within 14 days after the purchase, which gives shoppers enough time to experience the goods before paying. The full purchase amount is to be paid by the due date.

2.1.2. Campaign invoice

During peak seasons, such as Christmas, merchants may use campaign invoicing, which allows shoppers extended payment terms per purchase or a fixed due date.

AfterPay offers standard campaigns depending on the season. Merchants are able to set up specific campaigns through separate agreements. All campaigns can be retrieved by calling the AfterPay API.

For example, Christmas campaign A would be displayed at checkout as “Buy now, pay after Christmas” and payment is due by January 31, regardless of the actual purchase date as below

Christmas Campaign A payment term
Figure 2 - Christmas Campaign A

In contrast, Christmas campaign B would be displayed at checkout as “Buy now, pay in 30 days” and payment is due within 30 days from dispatch, as shown below.

Christmas Campaign B payment term
Figure 3 - Christmas Campaign B

2.1.3. Consolidated invoice

Providing convenience for shoppers who frequently make small purchases, AfterPay can consolidate all these purchases into a single invoice. The most common use case is a monthly invoice, which is typically suitable for transportation tickets or digital streaming services, but the frequency of the invoicing can be agreed separately. While the actual purchases are made on different dates, the payment terms of 14 days start from the date on which the consolidated invoice is issued. An example of a consolidated invoice is illustrated below.

Consolidated Invoice payment option
Figure 4 - Consolidated Invoice

2.2 Part payment

Through its part payment option, AfterPay allows shoppers to pay a particular purchase over time, enabling them to make higher order value purchases while limiting their monthly spending.

2.2.1 Fixed instalments

AfterPay offers fixed instalment plans with predefined maturities of 3, 6, 12, 24, or 36 months. The Payment API determines which of these instalment plans can be offered. The monthly amount to be paid in a fixed instalment plan is the same during the entire plan.

In order for shoppers to initiate a part payment, they need to both select the part payment option at checkout and sign a credit agreement within 14 days after receiving the first invoice. If the shopper does not sign the credit agreement, AfterPay treats the payment as a regular 14-day invoice. The credit agreement can be signed in AfterPay’s customer portal. In addition, shoppers in Sweden or Norway must also sign KALP.

The account notice is sent on country-specific dates (e.g. the 18th of the month in Sweden) and has payment terms of 12 days.

Fixed Instalments payment option
Figure 5 - Fixed Instalments

2.2.1 Flex payment

Merchants can provide shoppers with a more flexible payment option at checkout by allowing them to control the amount they are willing to pay per month, which means there is no set maturity. However, shoppers are obliged to pay a monthly minimum as defined by AfterPay. Shoppers can alter the amount they are willing to pay every month in AfterPay’s customer portal. Additional orders can be added at any time as long as the amount does not exceed the credit limit set by AfterPay.

To use the Flex payment options, shoppers must sign a credit agreement within 14 days after receiving the first invoice, and shoppers in Sweden or Norway must also sign KALP.

The account notice is sent on country-specific dates (e.g. the 18th of the month in Sweden) and has payment terms of 12 days like the fixed instalments.

Flex payment or Account payment option
Figure 6 - Flex payment

3 Customer Experience

AfterPay supports consumers in purchasing the items they desire by providing them with the freedom to pay whenever and however they find it most convenient. This is achieved by separating the purchase from the payment. Consequently, AfterPay distinguishes between the checkout and the post-purchase experience.

3.1. Checkout

After shoppers add items to their shopping basket in the webshop, they proceed to checkout to complete the purchase. Checkout can be designed in various ways. It typically contains the following information blocks that are relevant for payment: personal information about the shopper, invoice and delivery address, payment method selection and payment confirmation.

The first step is the identification step, during which shoppers are required to enter their personal details and the invoice and delivery address. In order to provide shoppers with an easy checkout experience, it is important to minimise the amount of data they need to enter. AfterPay, therefore, provides several look-up services as well as an address validation service. After having entered the required data, shoppers then proceed to the payment method selection.

AfterPay offers several different payment options that can be displayed in the payment selection step: 14-day invoice, campaign invoice, fixed instalments, and flex payment. After having selected a payment method, shoppers receive either a payment confirmation or a message that the payment option has been declined. A declined message always redirects the shopper back to the payment method selection page. To illustrate a generic checkout, see below.

AfterPay customer journey, checkout at merchant’s webshop
Figure 7 - AfterPay customer journey (checkout at merchant’s webshop)

For more detailed instructions on how to display the AfterPay payment methods, please visit AfterPay Developer Portal.

3.2. Post purchase

Shoppers’ post-purchase experience starts after they have completed the checkout process. This experience consists of two primary interfaces: invoice communication (email/text messages) and the AfterPay’s customer portal, “MyAfterPay”. Shoppers can experience a merchant-branded journey throughout these touch-points. Brand hero images and product images strengthen a merchant’s brand communication and campaign messaging.

The invoice communication is triggered once the merchant dispatches the goods. This communication is normally synchronized with the ‘capture’ API request.

In MyAfterPay, shoppers can see an overview of and control all purchases and payments. After logging in to MyAfterPay shoppers instantly see currently outstanding invoices and can choose how these invoices will be paid: bank transfer, direct debit, or any other local payment methods. In MyAfterPay the shopper can choose to partially pay an invoice. By going to the ‘Purchase history’, shoppers can see an overview of all purchases/returns.

After making a purchase via MyAfterPay, shoppers can save the payment method information in order to later make convenient purchases with a one-click payment function within the portal.

AfterPay customer journey, post-purchase
Figure 8 - AfterPay customer journey (post-purchase)