Foundations of Information Systems 

Table of Contents 


1. Business information

2. Business model

3. Challenges

4. Lessons for other businesses



Introduction to Afterpay Limited 

In the present era, new types of startups are establishing their operations in the market. Further, different ventures are operating with the help of the new idea and through this, they can survive in the market (Banerjee, et al. 2017). Mainly in the case when the business idea is unique then it can support the business to perform efficiently in the market.

Further, the development of the right business model is considered to be crucial for every business, and in turn, it helps in the direct growth of the enterprise also in the market. At the same time, in the development of the business, some challenges are faced that entrepreneurs have to manage properly for the smooth functioning of the business.

The present is based on the new venture named Afterpay Limited which is an Australian financial technology firm operating in the market of Australia, New Zealand, the United Kingdom, and the United States. The company was founded in the year 2015. The report provides information about the business, key challenges faced business model description and lesson for other businesses.

1. Business Information of Afterpay Limited 

After pay limited was founded in the year 2015 and it is an Australian based company. It is a kind of way for Australians to pay and at the same time the easy to use payment process of the firm allows shoppers to purchase their products today and at the same time, they can pay the due amount in the 4 equal fortnightly installments (Afterpay 2020). Mainly the company believes in providing a better experience to the customers so that they can shop easily. The selected company has a partnership with the different leading retailers of Australia such as General pants, Cue, Marcs, Hype DC, and Topshop. By entering into a partnership with these retailers it has become possible for Afterpay to conduct its business practices efficiently.

The target customers of the company are the online shoppers that involve both men and women of every age group. Mainly youngsters prefer to do online shopping and they prefer to purchase different products that are present on the online platform. So, in this case, Afterpay has provided a good option to the target customers where they can shop the products and can pay later without any interest (Nas 2016). The target market of Afterpay is based in the United Kingdom, New Zealand, the United States, and Australia. Hence, these markets are mainly targeted by the firm in the best possible manner.

Customers who are online shoppers mainly prefer to purchase different items on credit. Further, it has been found that some customers face an issue that they are unable to pay the amount for the goods purchased due to low purchasing power or any other reason. Therefore, in this case, customers need service associated with buy now and pay later without any interest. So, the Afterpay venture has focused a lot on handling this issue by introducing this service in the different markets.

The main benefit of the technological platform offered by Afterpay is that customers can shop products from the different brands and they can pay afterward. This is the main benefit of the service offered by the Afterpay firm (Afterpay 2020). Further, this kind of service directly provides remarkable experience to the customers and at the same time, they can easily shop for the products of the firm.

In the market, very fewer businesses are offering this type of facility to buy now and pay later. The credit facility provided by the firm without any interest and the option to pay the amount in installment is also highly effective. This kind of service that is offered by Afterpay to its target market is providing a competitive advantage to the firm.

Considering the Australian buy now and pay later industry the different companies are complying with the code of conduct and it highlights the minimum standards like how companies should conduct their business practices. The customer must be above 18 years (Derwin 2020). It has been found that around 30% of the Australian adults are utilizing buy now pay later service (BNPL). Therefore, it is feasible for the industry to develop an industry code to carry out good practices.

2. Business Model of Afterpay Limited 

The business model of Afterpay is regarded as the factoring of the accounts receivables. It represents that when the firm sells its accounts receivable to lender typically at discount. Factoring agreements take place between the lender and the business. In the year 2016-17, it has been identified that Afterpay has generated fees of A$23 million from the retailers and another A$6.1 million in the late fees (LB strategy+ 2019). This business model is stating that the income source in the case of Afterpay is taking fees from the retailers and at the same time charging late fees also. The company has written off the debt of A$33 million in the bad debt.

For instance, if any customer purchases A$100 using Afterpay then in such case the merchant receives A$96. Afterpay then collects four main installments of A$25 from the target, making A$4 profit. So, this is the way through which business practices can be carried out by the organization and in turn, it brings favourable results for the firm also.

The above chart represents that buy now pay later users are rising where Gen Z is 12.3% users, millennials represent 12.3%, Gen x represent 6.6%, baby boomers 1.9%, and at last pre boomers of 0.3% (Moore 2019).

Some risks are also associated with the business model of Afterpay such as it is possible that customers may not make the payment or the due amount due to which the business practices of Afterpay can be hampered (Dutta 2017).

The main value proposition is the attribute of the service where customers can pay the amount later without any interest and they can purchase the products also as per their requirement. This is the value proposition and convenience to the customers that are provided by the company to its target market.

3. Challenges for Afterpay Limited 

Establishing business operations is not an easy task and this requires planning and management of different resources also that are highly crucial. Further, in the different stages of organization development, several issues were faced by Afterpay and this acted as the main hurdle also. One of the main stages in the development stage was determining the need and requirements of the target market (Derwin 2020). It has been found that Afterpay was not at all able to know the exact requirement of its customers and this mainly acted as the challenging task or obstacle in front of the entity.

The second main challenge identified is linked with ascertaining the business-related risks. Afterpay has to identify well in advance like the main risks that can hamper the business practices and this was the most crucial task. Without determining the right level of risks it is not at all possible for any business to sustain in the market.

Considering all the challenges identified it can be stated that Afterpay managed to tackle all the issues through proper planning. Different plans were prepared well in advance such as ascertaining the risk, identifying the customer requirement, etc. These were the practices considered and they were adopted for the smooth functioning of the business operations in every possible manner. By handling the issues faced Afterpay enhanced its overall efficiency and this supported a lot in the success of the firm in the market.

4. Lessons for Other Businesses

For the other businesses operating in the same industry, different lessons are present that they can learn. Further, one of the main lessons is the development of the business model where the BNPL companies must focus on the formation of the right models through which business practices can be conducted in the right manner. In the case when the formation of a business model is not done positively then in such a case, the survival of the firm can be difficult due to this and it can lead to unfavourable results also. Another main lesson that can be learned is to understand the ways through which businesses can tackle their customers and this is also the main lesson that businesses can learn. Firms are required to understand the right tactics through which convenience to the target market can be provided easily and in turn, it can bring favourable results also for the organization in every possible manner. Therefore, these are valuable lessons for businesses that they can learn.

Conclusion on Afterpay Limited Analysis 

Hence from the analysis, it is quite clear that the BNPL market is growing rapidly. Further, the business practices of Afterpay are sound and at the same time business is efficient in terms of carrying out its overall operations efficiently. The business model of the firm also has some unique elements where latte fees and payment from the retailers are the main sources of income that supports Afterpay in conducting its operations smoothly. Along with this, some challenges were faced by the firm such as determining the key risks that were faced, etc.

References for Afterpay Limited Analysis 

Afterpay. 2020. About Us. [Online]. Accessed through < >. [Accessed on 28th April 2020].

Banerjee, A., Banerji, R., Berry, J., Duflo, E., Kannan, H., Mukerji, S., Shotland, M. and Walton, M. 2017. From proof of concept to scalable policies: Challenges and solutions, with an application. Journal of Economic Perspectives, 31(4), pp.73-102.

Derwin, J. 2020. Australia's buy now pay later companies are pledging to do better by their customers. Here's what they're promising. [Online]. Accessed through < >. [Accessed on 28th April 2020].

Dutta, S. 2017. Explainer: how lending startups like Afterpay make their money. [Online]. Accessed through < >. [Accessed on 28th April 2020].

LB strategy+. 2019. Business Model Innovation: AfterPay Touch. [Online]. Accessed through <>. [Accessed on 28th April 2020].

Moore, B. 2019. ‘Buy-now-pay-later’ taking consumer markets by storm. [Online]. Accessed through <>. [Accessed on 28th April 2020].

Nas, T. F. 2016. Cost-benefit analysis: Theory and application. Lexington Books.

Remember, at the center of any academic work, lies clarity and evidence. Should you need further assistance, do look up to our Business Information Systems Assignment Help

Get It Done! Today

Applicable Time Zone is AEST [Sydney, NSW] (GMT+11)
Not Specific >5000
  • 1,212,718Orders

  • 4.9/5Rating

  • 5,063Experts


  • 21 Step Quality Check
  • 2000+ Ph.D Experts
  • Live Expert Sessions
  • Dedicated App
  • Earn while you Learn with us
  • Confidentiality Agreement
  • Money Back Guarantee
  • Customer Feedback

Just Pay for your Assignment

  • Turnitin Report

  • Proofreading and Editing

    $9.00Per Page
  • Consultation with Expert

    $35.00Per Hour
  • Live Session 1-on-1

    $40.00Per 30 min.
  • Quality Check

  • Total

  • Let's Start

500 Words Free
on your assignment today

Browse across 1 Million Assignment Samples for Free

Explore MASS
Order Now

Request Callback

My Assignment Services- Whatsapp Tap to ChatGet instant assignment help

Hire Certified Experts
Ask your Question
Need Assistance on your
existing assignment order?

We care

MyAssignmentServices uses cookies to deliver the best experience possible.
My Assignment Services acknowledges the academic integrity guidelines prescribed as per Australian Universities to ensure that the services, sample material, and study resources available on our website, in no way are utilised to commit academic misconduct of any type. All users of our services must adhere to and affirm acceptance of all conditions elucidated in our policy document on academic integrity.

Please accept and affirm the following to be able to continue exploring our website and services: I agree to NOT use any educational material, study resources, assignment samples, online mentoring services, available on the web domain and all its subdomains to commit any academic misconduct. I have read and been made fully aware of the academic integrity policy of My Assignment Services and by clicking on the button below, I am in principle, wilfully and legally bound to adhere to guidelines of the academic integrity policy in whole and in part.
View Cookies policy | How we ensure Academic Integrity?