Accepting Afterpay as a merchant

Afterpay splits a purchase into instalments while paying you up front, and is strongest in Australia and New Zealand where it originated. In the United Kingdom and parts of Europe the same proposition operates under the Clearpay brand. What you are buying is credit risk transfer and conversion, not payment processing.

Economics

What the fee is actually for

Afterpay assumes the receivable and the credit decision on your customer, and pays you the full order value immediately. The fee reflects that risk plus the working capital, which is why it sits well above card acceptance. Comparing it to a card rate is therefore meaningless. The right comparison is against the incremental revenue it generates from customers who would otherwise not have bought.

The substitution problem

Some customers choosing instalments would have paid immediately by card or bank transfer. That volume is revenue you already had, now carrying a materially higher fee, and every merchant offering buy now pay later has some of it. Judging the method on overall conversion rather than on incremental conversion is the most common and most expensive error in this category.

Australia

Australia: the surcharging asymmetry closes on 1 October 2026

The Reserve Bank of Australia’s March 2026 Conclusions Paper removes surcharging on eftpos, Mastercard and Visa from 1 October 2026. In its reasoning the RBA noted that this enables four-party card networks to compete on a more level playing field with higher-cost payment methods that do not allow surcharging, including some buy now pay later products. For an Australian merchant, that means the cost comparison between cards and instalments changes at the same moment your ability to recover either from the customer disappears.

Brands

One product, two brands, and three questions that follow

Afterpay in Australia and Clearpay in the United Kingdom and parts of Europe are the same proposition under two names. That is usually mentioned as trivia. It has three practical consequences and each one is a question for your provider rather than a fact to file away.

Pricing. One product does not mean one rate. Your Australian rate and your European rate were probably agreed at different times, by different people, against different volumes, and neither negotiation had any reason to mention that the other existed. Ask for both on a single page and see whether the gap survives being looked at.

Reporting, and then leverage. If the two brands arrive as two lines in two systems, your global instalment cost is a number nobody in your business has ever produced. Ask whether they can be reported together, by market, in one file. And a provider carrying your volume across several countries under two brands is negotiating with a merchant who is treating it as two suppliers. Combining those two conversations costs nothing and is the most useful thing on this page.

Which payment provider supports Afterpay?

Zeller in Australia, alongside Adyen, Stripe and Cybersource, all document Afterpay, among others, as do most major gateways in the relevant markets. The useful questions are the fee as a percentage of order value, when you are paid, how returns and disputes are handled, where it appears in your payment selector, and what share of orders moved off a cheaper method after it was switched on.

Measurement

Measuring incremental conversion takes four weeks and a switch

The section above calls judging the method on overall conversion the most common and most expensive error in the category. Almost nobody corrects it, and the reason is that measuring incremental conversion sounds like it needs a data science team. It needs four weeks and a configuration switch.

The method is a holdout. For four weeks, turn the instalment option off for a random slice of sessions, say ten per cent, selected by a hash of the session identifier so that the two groups are otherwise identical. Then compare completed orders per session between the group that saw instalments and the group that did not. The difference is your incremental conversion, and it is the only version of that number that is not a guess.

Then the arithmetic decides it. Take 5 million euros of revenue with 20 per cent on instalments, so 1 million euros, at 4.5 per cent against 1.0 per cent for a card. That is 45,000 euros where the same volume on a card would have cost 10,000, so 35,000 euros of extra fee. If the holdout shows the group without instalments completed one per cent fewer orders, the method is buying 50,000 euros of revenue a year, which at a 40 per cent gross margin is 20,000 euros of gross profit against 35,000 euros of fee, and it is losing you money. If the gap is three per cent, it is buying 150,000 euros and 60,000 euros of gross profit, and it is comfortably worth keeping. Same fee, same volume, opposite conclusion. The only thing separating them is a measurement that costs four weeks and a ten per cent holdout.

Reviewing what this costs you

What you pay is set in your agreement, not by the scheme. Start by establishing whether you are overpaying your PSP, or put your own volume through the PSP Upside Calculator, because this is the method where the distance between a negotiated rate and a standard one is widest.

Relevant markets: Australia, New Zealand, United States, Canada