The Afterpay Touch Group Ltd (ASX: APT) share price climbed as much as 9.7% to $24.50 today after a U.S. news report and AfterPay media release revealed that it has now signed up more than 1.5 million U.S. shoppers across 3,300 different retailers not much more than a year after it launched in the country.
It also reportedly has another 1,000 retailers being "integrated" on to the Afterpay platform right now.
This kind of phenomenal viral growth is partly a product of the power of social media channels in influencing millennials these days, while retailers love the product as it allows them to increase their average basket sales and potentially win market share off non buy-now-pay-later retailers. The cherry on top of the cake for retailers is that Afterpay wears all the credit risk of the shopper not fully paying for the goods.
According to the media report in Women's Wear Daily, AfterPay's CEO, Nick Molnar, told the publication that it is now seeing lower loss rates for "first time customers" in the U.S. than Australia.
Bad debts of course are the key operational or credit risk for AfterPay with "first time" customers presumably the highest credit risk category.
Afterpay has also now launched its Clearpay buy-now-pay-later product in the large U.K. market with a number of retailers signed up for the launch, although it's yet to provide an official update on progress given it's still early days in that market.
The business ticks the boxes as a growth prospect, but that's arguably now baked into a $5.7 billion valuation that is larger than the likes of Bendigo & Adelaide Bank (ASX: BEN).
