Am I a Financial Drug Dealer?


Hi Scott,

I run a small online business with my wife. While I do not use Afterpay myself, we do offer it as a payment option for our customers. Does this make us financial ‘drug dealers’? I admit it makes me uneasy, but it has boosted our sales and I am afraid customers would turn to a competitor if we did not offer it. What would you say to merchants like us who feel stuck in the middle?


Scott's Answer

Hi Pete,

You’re right, there is a financial drug dealer here ‒ but it’s not you ‒ it’s Afterpay.

Founder Anthony Eisen told me over lunch that, after Google, Afterpay is now the biggest referrer of leads to retailers in Australia. And as a result they’ve now got a lot of retailers hooked on their drug: millions of shopping-happy millennials.

You’re currently paying Afterpay a percentage of each sale. Well, tech companies have learned a trick from drug dealers, and they have a track record of jacking up their prices once the addiction takes hold, to capture more of your margin. Google did it. Facebook did it.

Will Afterpay do it? Time will tell.

Yet one thing you should be very clear on: they are not your friend.