Afterpay a financial services from Australia, founded by Nick Molnar, a millennial entrepreneur, has declared war on credit and credit cards because millennials don't like credit.

Currently, there are 6,500 retailers who signed up for Afterpay services —-  Outfitters, Forever 21, Anthropologie, Avenue, and Skechers, to name a few. In fiscal year 2019, the company's revenue growth was at 97% and their negative profit margin was only 20%.

What about Visa?

Though Wall Street paid little attention to Afterpay, Visa certainly noticed that it’s slowly becoming the fastest growing competitor undermining the whole concept of credit cards and that this competitor has taken over Australia and is heading for the U.S. and the U.K. It offers no-interest loans, which is way better than whatever interest rate the credit card companies are charging.

If Afterpay will continue to dominate the millenials, this will be a serious threat to Visa.  Meanwhile, Afterpay and Visa have signed a collaboration agreement to work on Visa's new version of no-interest advance payments.

In the future, some large financial company like Visa or PayPal or Square, will acquire Afterpay. It has a sharp business model and a wonderful brand that is beloved by its users. I hope the company will stay independent, at least for a while. I'd like to get my own 10-bagger.

Source: The Motley Fool


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