Qantas Points with Afterpay

[Mattg]

Qantas Frequent Flyer is launching a partnership with Afterpay later this week.

Looks like you'll be able to earn 1 Qantas point per dollar, and there will be a bonus of 500 Qantas points for new Afterpay customers that sign up and link their QFF account.

QANTAS FREQUENT FLYER TEAMS UP WITH AFTERPAY

Keep up to date with Qantas' latest news and information, media releases, articles, images and more with the Qantas News Room.

www.qantasnewsroom.com.au

Personally I won't be joining Afterpay for this (I'm not a fan of Buy Now, Pay Later services in general), but may be of interest to some.

 

[wannabeinvestmentbanker]

Interesting that the point/$ is equivalent if not better than some credit cards. I assume other point purchasers (I.e. card issuers) may not be that happy with the arrangement even though BNPL is such a small fraction of the transaction market.

 

[dylarr]

BNPL is such a small fraction of the transaction market.

If you look at the transaction market as a whole, yes. But according to this press release Afterpay alone account for more than 15% of all online retail in Australia and that is not insignificant.

You could pair this up with a Qantas points earning credit card to make repayments to Afterpay for additional points earn (Visa or Mastercard only).

BNPL is good for people who use these services to their advantage (i.e. use it only for things that you had the cash for anyway to manage your cash flow). So this could be a very desirable offer for some people.

 

[jakeseven7]

Interesting that the point/$ is equivalent if not better than some credit cards. I assume other point purchasers (I.e. card issuers) may not be that happy with the arrangement even though BNPL is such a small fraction of the transaction market.

BNPL is a huge % for some retailers, you may be surprised.... it all starts somewhere right.....

 

[wannabeinvestmentbanker]

BNPL is a huge % for some retailers, you may be surprised.... it all starts somewhere right.....

No doubt it is for some. I was more referring to RBA transaction system volumes. Debit still dominates but the growth rate in BNPL transactions is certainly indicative and reflected in the respective equity prices.

I think it's a clever deal and beneficial for consumers just thought banks might be a bit displeased.

 

[Kerrodt]

Perhaps it is a strategy by Afterpay to lure some customers business away from their credit cards And onto the Afterpay platform by offering a points rate that is better than credit cards. Afterpay aren’t profitable at the moment so a loss leader like this is just more red ink for them.

 

[Hoffsare]

Easy double dip here at no cost.

 

[wannabeinvestmentbanker]

Easy double dip here at no cost.

I wasn't aware of this one. Another AFF pearl of wisdom.

I've had a frustrating day dealing with banks terrible UIs and time consuming processes so can see the allure of these offerings when banks really don't seem to be adapting or improving.

 

[VPS]

I've never used Afterpay - are there any gotchas that you need to be aware of. If something is $400 I presume I pay 4x $100 and can you use your credit card to pay. Is it a direct debit or do you have to transfer money?

 

[dylarr]

I've never used Afterpay - are there any gotchas that you need to be aware of. If something is $400 I presume I pay 4x $100 and can you use your credit card to pay. Is it a direct debit or do you have to transfer money?

Yes that's pretty much it. A very limited set of merchants (such as Jetstar) surcharge Afterpay, but most don't - so as per your example if the total cart costs $400, then that's exactly what you will pay split up evenly over 4 payments. As long as you pay your instalments on time, there are no fees or charges from Afterpay.

The only way to repay is using automatic debit from a Visa / Mastercard, so you can double dip here if your card is points earning on the repayments. If the payment declines you are charged a $10 late fee by Afterpay.

 

[L1925]

These kind of offers baffle me

Afterpay's income is about 25% from late fees and 75% from merchant fees, the company has a 2% profit margin and is valued near the same as scentre (westfields).

What kind of message does Qantas send when they offer a 1 point for $1 spend via afterpay yet charge us the same price if paying them directly ?

Why not offer an existing Frequent Flyer customer a better offer directly as a thank you for loyalty rather steering the customer in to spending money they could not afford in the first place?

Bonkers

 

[Daver6]

I've never used Afterpay - are there any gotchas that you need to be aware of. If something is $400 I presume I pay 4x $100 and can you use your credit card to pay. Is it a direct debit or do you have to transfer money?

Given a line of credit is being extended, I'd imagine this would show up on credit reporting.

Yes that's pretty much it. A very limited set of merchants (such as Jetstar) surcharge Afterpay, but most don't - so as per your example if the total cart costs $400, then that's exactly what you will pay split up evenly over 4 payments. As long as you pay your instalments on time, there are no fees or charges from Afterpay.

I was under the impression that merchants are not allowed to pass on the cost from Afterpay. This is obviously to the annoyance of credit card companies where legislation means the cost can be passed on.

 

[L1925]

I was under the impression that merchants are not allowed to pass on the cost from Afterpay. This is obviously to the annoyance of credit card companies where legislation means the cost can be passed on.

Suppliers don't list the cost of the merchant fees and just make up a "retail" price with everything rolled in. They can then legally selectively offer a discount based on how you are paying. i.e. pay cash(real cash) - XX%, visa/master card -XX% etc

 

[VPS]

Given a line of credit is being extended, I'd imagine this would show up on credit reporting.

That doesn't bother me - I'm semi retired and if I ever needed a mortgage again then things will be pretty grim

I was just thinking about double dipping for more points

 

[eastwest101]

These kind of offers baffle me

Afterpay's income is about 25% from late fees and 75% from merchant fees, the company has a 2% profit margin and is valued near the same as scentre (westfields).

What kind of message does Qantas send when they offer a 1 point for $1 spend via afterpay yet charge us the same price if paying them directly ?

Why not offer an existing Frequent Flyer customer a better offer directly as a thank you for loyalty rather steering the customer in to spending money they could not afford in the first place?

Bonkers

Very good question. I can think of two answers off the top of my head.

Because Afterpay are prepared to pay more than credit card issuer banks to buy QFF points to attract high yield valuable customers into their own payment platform? Or more accurately - attract as many new customers to its platform as quickly as possible, the idea is to grow your customer base first then work out how to monetize them later.

Or it could be the matter that QFF is not really a loyalty scheme, it's a data matching and customer info/behavior and big data trading/marketing business pretending to be an airline loyalty scheme.

Think of Afterpay as a legal extortion racquet charging retailers to supply interest free finance to Afterpay's customers. Afterpay is all about ubituitiosnes and weight of numbers dictating that the payment platform must be accepted, widespread, universal and a part of doing business. They are essentially doing to banks what banks previously did to consumers and businesses before but they will do it digitally without all the costs and consumer regulation that comes from being a financial lender or bank.

 

[Daver6]

That doesn't bother me - I'm semi retired and if I ever needed a mortgage again then things will be pretty grim

I was just thinking about double dipping for more points

This is AFF. We don't care about mortgages...it's all about credit card churning

 

[AustraliaPoochie]

This earn rate is much more (higher) than the earn for QTMC, at 0.25 points per $1 Aud$ domestic spent.
Shows how much they value people using their own money to buy flights and other things, debt is good for them.

 

[Port Power]

The concern using Afterpay is if you need to cancel. There doesn't appear to be an avenue for refunds. This would mean a credit voucher is your only option, no matter what class of fare has been booked. I am not 100% certain of this, but have seen on so many retail sites that refunds do not apply if paid using Afterpay.

 

[serfty]

I am not 100% certain of this, but have seen on so many retail sites that refunds do not apply if paid using Afterpay

Before this year that would not have been a significant consideration.

Even if you could purchase Qantas flights with Afterpay, aside from possibly saving a CC fee on a multi segment booking I can't envisage this usurping the use of a 2+ points per $ Amex.

 

[VPS]

This is AFF. We don't care about mortgages...it's all about credit card churning

Sadly I think my churning days are very limited now