MILAN — There’s plenty of room for alternative payment methods to gain traction in Italy, according to Clearpay.
The buy now, pay later company, which goes by this moniker in Europe but is best known as Afterpay in the rest of the world — marked its first anniversary since launching in Italy releasing a study on local customers’ evolving shopping habits.
Conducted last month with Human Highway, the research surveyed 1,036 Italians, aged 18 to 54, equally distributed across regions and all already shopping online to ensure their familiarity with digital tools.
The study showed that 45.5 percent of the sample has purchased items online in the past three months, with half of them buying fashion pieces, followed by books, pharmaceutical and cosmetics.
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Prices are a key element driving purchases for 70 percent of interviewees, especially for fashion and home décor products. Women take into consideration the pricing factor especially when buying clothing and cosmetics, while for men it becomes relevant when shopping sport clothing and equipment. Even if the younger generations are not the most significant shoppers of pharmaceuticals, these products’ price tags represent a significant variable for 69 percent of consumers less than 25 years of age approaching the sector.
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Buy now, pay later services could impact this cautious attitude to consumption making some purchases more affordable but the study revealed this payment method is still little known in the country, as 62.3 percent of the interviewees ignore it. Only 7.3 percent of the sample tested this payment system while 2.5 percent often use it.
“This is a huge opportunity for us,” said Clearpay’s country manager for Italy Federica Ronchi.
Other data supported her enthusiasm: according to the study, 56.1 percent of those who are not familiar with the system would like to be interested in using an online shopping service that permits to divide the payment in installments, while interviewees who have tested the method praised its benefits, including flexibility and immediacy.
Ronchi underscored that other payment methods based on installments were also favorably perceived by the sample but were additionally flanked by concerns in terms of bureaucratic procedures, skepticism or overall sense of being in debt.
“If you think about it, Millennials and Gen Z-ers don’t even use credit cards that much, they prefer prepaid ones or debit cards because they have better control of their expenses in that way,” noted Ronchi, underscoring how Clearpay enables consumers not to engage their monthly credit limit as its formula is based on four installments, the first being paid at the moment of the purchase and the remaining three only accredited every 15 days after it.
This system empowers consumers to access the things they want and need, be more open to new offerings, increase average transaction sizes or even shop in moments brands used to register inflections in sales, like at the end of the month when shoppers tend to wait for their next paycheck.
Clearpay’s key assets include zero costs for consumers and an intuitive layout, based on a library of brands — including small and medium-sized businesses — divided into key categories such as fashion, beauty, sports and leisure, home and kids. Attracting especially younger generations, this unfussy approach enables merchants to intercept a sought-after customer base, registering around a 30 percent increase in the average ticket.
“We’re focused on these product categories because these are the ones particularly interesting for our target,” confirmed Ronchi, revealing that 77 percent of Clearpay’s customer base is made of Millennials and Gen Zers. “Especially fashion and beauty are key, considering they make for repeated purchases,” she continued, underscoring that, on average, a Clearpay customer uses this payment method 12 times per year.
Clearpay’s launch in Italy was coincidental to the one in France and Spain. In one year Clearpay secured more than 7,000 merchants and attracted 2.5 million active users in the three countries combined. On a global scale, the company serves 122,000 merchants and 19 million active users.
While other competitors are gaining traction in Italy, such as Klarna and Scalapay, Ronchi stressed that Clearpay’s focus has always been merchant-centric, rather than aimed at facilitating just final consumers.
“Our goal is not to keep the customer on our website, but rather enabling him to land on merchants’ respective platforms,” said the executive, adding that other differences with competitors include not forcing brands into exclusive contracts to further help brands to intercept different audiences and improve their customer experience offering additional payment options.
Founded in Australia in 2014, Afterpay launched in the U.S. in 2018 and as Clearpay in the U.K. the following year. As reported, last year the company was acquired by American financial services and digital payments company Square Inc. — now renamed Block Inc. — for $29 billion in a giant fintech deal.