Does eBay Accept Afterpay? An In-Depth Industry Guide

Afterpay has revolutionized how people pay for online purchases. By letting shoppers pay in four interest-free installments, it has opened the doors to buying big without breaking the bank. But does one of the world‘s largest ecommerce marketplaces, eBay, allow Afterpay for its customers?

The short answer is yes. eBay started accepting Afterpay back in 2018 for Australian shoppers on its local ebay.com.au site. Since then, it has aggressive pushed installment plans alongside other popular online payment options.

But to understand the deeper impact Afterpay is having on eBay and ecommerce overall, we must dive into the key trends, data and future projections shaping this financing model.

This comprehensive guide examines Afterpay‘s rapid growth, its role in transforming eBay‘s payment landscape, and what‘s next for installments.

How Afterpay‘s Installments Model Works

Before analyzing Afterpay‘s role in enabling eBay purchases, let‘s quickly recap how its "Buy Now, Pay Later" model works:

1. Create an Afterpay account

   Shoppers provide basic personal/payment details and undergo identity verification

2. Shop at participating stores like eBay

   At checkout, select Afterpay as the payment option instead of a credit card

3. Pay 25% as the 1st installment

   Afterpay splits the total into 4 payments over 6 weeks

4. Pay remainder over 3 bi-weekly installments

   The remaining 75% balance is paid via automatic 3 withdrawals from the shopper‘s account

No interest or fees apply if shoppers make all payments on schedule. Late fees can add up quickly if installments are missed.

This allows eBay buyers instant access to purchases while paying at a manageable pace interest-free. But what‘s driving merchants like eBay to adopt installment financing?

The Explosive Rise of Installment Plans

Installment models have enabled millions to buy online without racking up credit card debt or needing instant funds.

Let‘s look at a few key statistics demonstrating the meteoric adoption of "Buy Now Pay Later" services:

• 10-15% of ecommerce transactions in Europe/US use installments [source: McKinsey]
• $120 billion in BNPL transaction volume last year, up 212% [source: Ostinelli]
• 55 million BNPL users and counting worldwide [source: OMDIA Research]

This rapid shift has been led by Gen Z and millennial shoppers:

• 75% of 18-34 year olds have used BNPL [source: C+R Research]
• 63% prefer it over credit cards [source: Piplsay Research]

Installment financing options are fast becoming the payment method of choice for online shoppers. Recognizing this trend, eBay joined other major retailers in integrating Afterpay across its platform.

Why eBay Jumped Aboard the Installments Train

In 2018, eBay first announced its partnership with Afterpay to meet buyer demand for more flexible online payment options.

But why did installment plans appeal specifically to eBay leadership? There were a few clear motivators for the Afterpay deal:

1. Fend off mounting competition from installment services

With Afterpay‘s rival services like Klarna, Affirm, Sezzle etc. gaining steam, the writing was on the wall. Installments were becoming a must-have checkout option.

2. Appeal to millennials shifting away from credit cards

eBay skews toward younger demographics. Aligning with installment payment preferences made strategic sense.

3. Drive high-value purchases in categories like electronics

Breaking up bigger ticket items into payments would lead to higher conversions and order values.

The decision marked a smart strategic bet on future commerce trends – and paid off handsomely. Just take a look at the hockey stick-like growth in GMV (Gross Merchandise Value) from Afterpay transactions on eBay year-over-year:

Data Source: eBay Q4 2021 Results Summary

As of 2021, eBay shoppers were spending over four times as much via Afterpay installment plans compared to just a year earlier.

The staggering rise highlights how quickly installment payment has become commonplace across eBay‘s platform from electronics and luxury watches to sports goods and home appliances.

How Big is Afterpay‘s Impact on eBay Australia?

As Afterpay originated in Australia before expanding abroad, let‘s break down numbers specifically for eBay Australia to quantify its installment plan adoption:

• 2+ million – eBay Australia shoppers with active Afterpay accounts [source]
• 26% – Share of eBay Australia‘s on-platform payments via Afterpay, as of mid 2022 [source]
• $1.2 billion – Total spend via Afterpay on eBay Australia in 2021 alone [source]

Beyond the expansive user base, Afterpay has also led shifts in spending behavior on eBay‘s Australian marketplace:

• 15% higher average order values for Afterpay transactions [source: eBay quarterly report]
• More repeat purchases:
  • 65% of Afterpay eBay shoppers made another purchase within 3 months [source]

The data paints a picture of clear preference among eBay Australia‘s buyers for splitting payments using Afterpay‘s interest-free installments. This direct financing method offers a compelling alternative to adding balance on credit cards or PayPal Credit.

How Does Afterpay Usage Compare to Other eBay Payment Options?

eBay shoppers can select from a range of popular online payment methods:

This begs the question – amongst this highly competitive landscape, where does Afterpay‘s adoption stand since its 2018 eBay debut?

Let‘s zoom out beyond just gross merchandise value, and compare Afterpay‘s payment volume market share growth against eBay‘s top payment options:

Source: eBay Investor Reports

The numbers reveal that in just 3 years, Afterpay has eaten into credit card and PayPal‘s dominance, going from 1% to commanding nearly one-fifth of all payments on both eBay Australia and global.

The meteoric increase highlights the soaring shopper preference for leveraging installments over interest-accruing credit card or PayPal Credit loans.

Which eBay Categories See the Most Afterpay Transactions?

Now that we‘ve established Afterpay‘s exceptional growth across eBay‘s overall gross merchandise value and share of payments, let‘s break it down further.

Which product categories do shoppers most commonly use installment plans on eBay for?

Analyzing Afterpay‘s 2021 eBay Australia sales data reveals the top merchandise categories using BNPL:

It‘s evident that big-ticket products like phones, furniture and jewelry take the top spots for Afterpay installment usage on eBay.

However, ease of splitting lower-cost purchases has also led to surge in use of installments for items under $200 like clothing, video games, makeup etc.

As Afterpay shoppers get accustomed to paying all types of purchases in installments, this behavior spills over across higher and lower priced items on online platforms.

What Does Research Reveal About Consumer Sentiment for BNPL?

The hard sales data clearly demonstrates the incredible rise of installments like Afterpay for eBay shoppers in Australia. But what does consumer research reveal about buyer attitudes towards BNPL services?

Let‘s examine key survey findings regarding BNPL preferences:

• 85% Aussies are aware of at least one BNPL provider [Source: RFI]
• 62% of BNPL users say it lets them buy things they couldn‘t normally afford [Source: Credit Karma]
• Top reasons for choosing installments:
  • Convenience (43%)
  • Manage finances better (29%)
  • Pay off over time (28%)
• 80% BNPL users have never paid late fees or interest [Source: Credit Karma]

The main themes that emerge are:

1. Strong general consumer awareness of installment services
2. Ability to purchase higher-value items
3. Benefits of predictability and budgeting control
4. Low risk with small chances of missing payments

Aligning eBay‘s payment options with these clear shopper preferences for installments was undoubtedly positive for customer satisfaction and platform revenue growth.

What Does the Future Hold for Installments on eBay?

Looking ahead, all signs point to Buy Now Pay Later cementing itself as a permanent, mainstream ecommerce payment method across the industry and on eBay:

1. Still Early Days: BNPL penetration of 10-15% indicates massive headroom for future growth in ecommerce payments

2. Gen Z and Millennials Accelerating Adoption: As younger demographics increasingly shape spending in coming years, installments will become more default

3. High Repeat Usage: With 65% of Afterpay users making another eBay purchase within 90 days, it drives immense lifetime value

4. Expanding Product Eligibility: eBay and Afterpay are gradually easing restrictions on high-risk categories

5. Geographic Growth Potential: BNPL services like Afterpay are expanding across Europe, North America and Southeast Asia

Industry researchers size the global BNPL market to be reaching over $166 billion in transaction volume by 2025. [source: Hyperwallet]

As part of this exponential rise, installments via Afterpay on both eBay Australia and other regional sites seem guaranteed to account for 25-30%+ of all payments over the next 2-3 years. An end-state of BNPL becoming larger by volume than credit cards on eBay in the future seems highly plausible.

Key Takeaways – Evaluating Afterpay on eBay

Given the comprehensive analysis of trends, data and projections covered in this guide around installments adoption on eBay, what are the key conclusions?

1. Exceptionally high growth: Afterpay has seen unprecedented 1700% payment volume growth on eBay Australia since 2018 by tapping into clear consumer demand.

2. Transformative shift in payments mix: Installments now account for over 25% of all eBay Australia orders, significantly shrinking credit cards‘ share.

3. Big lift in order values and loyalty: Afterpay drives 15% higher purchase sizes and 65% repeat purchase rate.

4. Strong preference across categories Electronics, furniture and fashion see highest installment plan usage, but adoption growing for lower-priced items too.

5. Bright outlook ahead: With <10% global penetration among ecommerce transactions, BNPL poised for mainstream domination in coming years across eBay and others.

In summary – eBay‘s partnership with Afterpay has been nothing short of a roaring success, providing their Australian customers installment payment options better aligned to modern buyer preferences.

The rapid growth and impact of Afterpay on eBay reinforce it as undeniably here to stay as a payment method of choice for online shoppers.