Afterpay’s New Loyalty Program Rewards On-Time Payments

Need to Know

• Afterpay’s rewards program, called Pulse, is the only program of its kind in the buy now, pay later ecosystem.
• Pulse rewards users who make on-time payments; Afterpay is responding to an uptick in debit card users by incentivizing responsible spending, unlike credit card companies, which reward higher spending.
• The program is now available to U.S. customers; Afterpay will roll out Pulse in Australia, New Zealand, and the UK in the next few months.
• Buy now, pay later has been surging in popularity as other brands such as Klarna and Splitit expand their reach into North America.

Analysis

As buy now, pay later plans spike in popularity among online shoppers, industry leader Afterpay has given consumers—and retailers—another reason to use their services: Pulse, a rewards program that incentivizes on-time payments.

The program, which has already launched in the U.S., will give users access to exclusive discounts, product launches, and promotions, and will offer increased payment flexibility and no up-front payments from selected retailers.

According to Afterpay, Pulse is being launched partly in response to new research that shows Millennials and Generation Z are increasingly choosing to make purchases using their debit card—rather than credit cards—but are not currently being rewarded for this decision.  In 2020, for instance, 90% of Afterpay’s customers made purchases via debit.

“Until today, loyalty programs across our industry have encouraged excessive spending—leaving no options for those shoppers who want to spend responsibly and avoid expensive fees and extended debt,” Nick Molnar, co-founder and U.S. CEO of Afterpay, said in a statement. “We built Pulse to fulfill a need and offer a program in which both consumers and retailers benefit. This approach is fundamental to our mission and values as a company to encourage financial wellness and power an economy where everyone wins.”

The Pulse announcement comes just months after Afterpay announced it would be making its buy now, pay later platform available in-store for some U.S. retailers—the tool was previously an online-only function. Afterpay expanded into North America in March by partnering with Marqueta, a card-issuing platform using an open API.

Afterpay is the industry leader in buy now, pay later tech, and is taking an even stronger position with the launch of Pulse. However, the fintech is trailed closely by a series of competitors, as financing options for e-commerce purchase become increasingly popular among younger consumers. Specifically, in June, fintech company Klarna revealed its own buy now, pay later program with its own loyalty program, which rewards users for each dollar spent (unlike Pulse, whose incentive is payments, not purchases). Fellow fintech company Curve also announced it would be entering the buy now, pay later arena in June with Curve Credit, which offers the option for purchases made with Curve card to be paid back over time in installments.

Afterpay’s Pulse program is available in the US only at this time but will expand to the U.K., New Zealand, and Australia in the coming months.