Gap Debuts Buy Now, Pay Later Integration with Afterpay

The partnership is Afterpay's largest to date and could impact over 170 million customers.

Need to Know

  • Afterpay will now be available to online shoppers from all Gap Inc. brands, including Old Navy, Banana Republic, Athleta, Gap Factory, and Banana Republic Factory.
  • Afterpay is a leading buy now, pay later fintech, offering customers the ability to pay for purchases in four equal installments.
  • The partnership marks the largest to date for Afterpay; Gap reported $16 billion in sales volume in 2019.
  • Afterpay currently has 6.5 million active users in the U.S., up from 1 million in March of last year.


Gap shoppers will have added payment flexibility this holiday season, as the clothing retailer has entered into a partnership with buy now, pay later payments company Afterpay.

The partnership, which will bring Afterpay’s financing infrastructure to Gap. Inc’s various brands, including Old Navy, Banana Republic, Athleta, Gap Factory, and Banana Republic Factory, marks the largest deal to date for Afterpay. According to a press release announcing the partnership, Gap reported $16 billion in revenue for 2019; the company’s corporate portfolio reaches roughly 80% of the U.S. apparel market, with 170 million known customers.

“By adding Afterpay to our other payment options, we’re able to provide a more customized shopping experience, give our customers additional convenience and control and reach a younger demographic who may not have been able to shop with us before,” John Strain, Gap Inc. chief digital and technology officer, said in a statement.

Gap struggled during the COVID-19 pandemic, as store closures led to a 50% decline in revenue for the company for the quarter ending in June. However, the company plans to rebound in 2021; investments in e-commerce, plus a pull-back from “low-productivity, high-rent” stores should return the company to profitability next year, the company said late last month.

Afterpay has skyrocketed in popularity throughout the COVID-19 pandemic, as online shoppers, particularly in younger demographics, seek more flexible payment options due to financial insecurity brought on by the coronavirus. In March 2019, the company hit one million customers in the US; now, Afterpay has 6.5 million active users in the U.S., and 11 million users worldwide. Afterpay works with nearly 14,000 merchants, and nearly 63,000 retailers. The company also recently expanded its in-store availability in the U.S.

As buy now, pay later technology has been widely adopted by retailers and merchants, fintechs, and financial institutions have taken note—and followed suit. PayPal rolled out its own BNPL function in August; Mastercard partnered with Splitit, a BNPL provider, in June. Curve, meanwhile, began testing Curve Credit, a BNPL function, in the summer, while American Express launched Pay Over Time in September.