Do you have an electricity bill, or a fancy dinner with friends, that you would prefer to pay off in installments but Afterpay (ASX: APT) isn’t an option when paying the bill?
Today Afterpay has announced Afterpay Retro, which gives customers 72 hours to retroactively create a pay-in-four model for eligible debit transactions.
Also read: Square to buy Afterpay for $39 billion
To have access to the service you will need to install the new Money by Afterpay (Money) app which is also being launched.
Afterpay Retro: What is it?
With the Money app customers will be able to access the Retro feature, as well as access to the already established buy-now-pay-later (BNPL) integration, a daily transaction account with a debit card and up to 15 savings accounts.
The Retro feature can be used by customers for up to $200 of their Afterpay overall ‘available to spend’ amount.
For example, if you get a $300 electricity bill you can choose to pay $100 now and use Afterpay Retro to pay the remaining $200 in installments.
You would have to pay the full amount of the bill upfront, access the Money app and use Retro to get the $200 back before paying the installments.
It will impact how much you are able to put on Afterpay - so if your Afterpay limit is $1,000 and you use the full $200 for a Retro payment, you will have $800 left to use for BNPL services.
But, why use Retro?
If you have the money in the first place to make your purchase why would you use the Retro feature?
Well, Afterpay said customers had flagged the feature as a way to avoid overdraft fees as the younger generation moves away from credit cards.
“The feature was also designed in response to Millennials and Gen Zers continuing to shun credit cards with many not even signing up for a credit card at all,” Afterpay said in its announcement.
The Retro feature follows the same model as its BNPL product in that it costs the customer nothing provided they pay installments on time.