Business Model Analysis of Afterpay Touch: MGMT Report

This report provides a comprehensive analysis of Afterpay Touch's business model, examining its nine building blocks within the Business Model Canvas framework. The analysis delves into customer segments, key partners, value propositions, key activities, channels, revenue streams, cost structures, key resources, and customer relationships. It explores the interrelationships between these elements and identifies critical success factors and potential downside risks. The report also evaluates business model changes and offers recommendations, such as adopting a customer-centric approach and localizing services, to enhance Afterpay Touch's competitiveness. The report concludes with a summary of the company's strengths and areas for improvement, offering valuable insights for students studying business and management.

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Management
Name of the Student
Name of the University
Author note

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Executive Summary
The report has thrown light on the overall analysis of the nine building blocks of the
respective organization Afterpay Touch which was established and founded five years ago.
The different interrelationships between the building blocks have been considered that
provided a brief overview of the different kinds of issues which are required to be managed
appropriately with the different recommended strategies to improve the scenario
appropriately. The recommendations which can be adopted by the company are as follows:
 Firstly, the model related to becoming customer-centric is essential which will be
beneficial in increasing the customer base, and it will be helpful for the growth of the
company
 Moreover, the localization of the different products and services which are offered by
them to the customers are required to be managed, and it will improve the overall
scenario in the Australian economy

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Table of Contents
I. Introduction.............................................................................................................................3
II. Business model......................................................................................................................3
A. Building blocks.................................................................................................................3
1. Customer segments........................................................................................................3
2. Key partners...................................................................................................................4
3. Value proposition...........................................................................................................4
4. Key activities..................................................................................................................4
5. Channels.........................................................................................................................5
6. Revenue streams.............................................................................................................5
7. Cost structure.................................................................................................................5
8. Key resources.................................................................................................................5
9. Customer relationships...................................................................................................6
B. Interrelationships...............................................................................................................6
C. Critical success factors......................................................................................................7
D. Downside risks..................................................................................................................7
E. Business model changes....................................................................................................7
III. Conclusion............................................................................................................................8
IV. Recommendations................................................................................................................8
Appendix 1- Table 1- Business Model Canvas of Afterpay Touch...........................................9
(Source: Created by Author)......................................................................................................9
Appendix 2- Table 2- Methods Used by Afterpay Touch Company.......................................10

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References................................................................................................................................11

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I. Introduction
Afterpay Touch Group Limited is one of the Australian Financial Technology
organization which is operating in different countries such as Australia, New Zealand and the
United States of America. Moreover, the company was founded in the year 2015, and the
company is headquartered in Melbourne, Australia (Afterpaytouch.com, 2019). Moreover,
after the merger of Touchcorp and Afterpay in the year 2017, Afterpay Touch has emerged as
one of the most successful leaders in the ‘buy now pay later’ in the entire industry. Moreover,
there has been a massive increase in the revenue of the organization of $AU 113.9 million
until the year 2018, and there are more than 2.3 million users.
II. Business model
It is one of the most successful financial technology organizations which has helped
in introducing the processing system of payment for the end-to-end users, and it helped in the
digital payment options in an accurate manner.
A. Building blocks
The nine building blocks of the business canvas model are required to be discussed in
the next sections that will be beneficial in analysing the essential aspects which should be
considered by the respective company to perform the business appropriately.
1. Customer segments
The major segments of the customers include the ones which are inclusive of the
vendors, merchants along with the different business companies. Afterpay Touch will be
improvising along with enhancing the different business-related operations, and it will be
helpful in the development of the business solutions (Ali, Warren & Mathiassen, 2017). The

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company helps in providing the multi-sided platform to various customers that will be
essential in serving the different requirements of the other companies appropriately.
2. Key partners
The major partners of the company include the different payment providers as well as
vendors. The primary activity of the respective organization includes and maintain the
strategic alliance aspect which helps manage the supplier as well as buyer relationship, and it
helps in making the business successful in managing and performing the different business
activities in an appropriate manner (Andreassen et al., 2018).
3. Value proposition
The significant and most appropriate value proposition of the organization is
providing the different customers such as the different companies along with the other
companies a secured platform which will be beneficial in managing the various tasks. There
can be the inclusion of the multi-currency related transactions which assists in differentiating
themselves from the other competitors present in the market (Antikainen & Valkokari, 2016).
The company follows the dominant qualitative approach as customer satisfaction is the
primary and most appropriate approaches which are undertaken by the company Afterpay
Touch.
4. Key activities
The principal activities which are included as the key aspects include the different
aspects related to the research as well as the development of the various events (Bagheri &
Movahed, 2016). The security of the separate transactions which are made by the company is
one of the most effective and efficient approaches which is handled by the company, and it
will be helpful for them in gaining competitive advantage in the market.

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5. Channels
The website of the company is one of the major channels of the respective company
Afterpay Touch that assists the different mobile service providers, and it will make the
different transactions along with the business to have become more successful in nature
(Biber et al, 2017). There is the inclusion of the various offers as well as discounts that assist
and helps the company in gaining competitiveness in the market.
6. Revenue streams
There are two major classes which should be considered in the respective approach of
the revenue model of the Afterpay Touch Company. The commission is one of the significant
aspects of the revenue streams that are paid to the vendors, and they do not deal with the
customers in a direct manner (Burch et al., 2016). The other aspect of revenue of the
company that is utilized by Afterpay Touch is the inclusion of the escrow accounts, and it
helps in offering the customers with the different kinds of payments and other offers without
any interest.
7. Cost structure
The cost-driven approach which is followed by Afterpay Touch is one of the aspects
in the cost structure, and it assists in serving the different customers with the various
discounts at the zero marginal costs (Caetano et al., 2017). There is the inclusion of the other
costs that are concerning security, and it helps them in reducing the concept of the laundering
of money.
8. Key resources
The licensing is one of the significant approaches which should be managed by
Afterpay Touch as it will assist them in designing the various applications for the users and it

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will improve the utilisation of the different products and services in an accurate manner
(Davies & Doherty, 2018). There is the inclusion of bypass of the various regulations, and the
competitors will not be able to copy the different approaches followed by them, and they
cannot imitate the different designs which are already adopted by them.
9. Customer relationships
Afterpay Touch does not include the relationships with the various users present in
the market in any form. It is just regarded as the ecommerce platform, and the main focus of
the website is to offer different customers with the financial services with a click, and it will
be beneficial for the overall success of the firm in comparison to the other competitors
present in the market (Gassmann, Frankenberger & Csik, 2016).
B. Interrelationships
Afterpay Touch is one of the financial service providers which helps in building the
relationships and appropriately increasing the market share. The value proposition of the
organization is inclusive of the providing the customers with most secure and safe payment
options which can be managed by the organization with the security and safe transactions as
to gain competitiveness in the market (Heikkilä et al., 2016).
The customer relationships are not being maintained at a personal level as it is a
platform which provides the customers with the different kinds of financial services and
ensuring compliance and security related to the activities are helpful for the company to
succeed in the business (Joyce & Paquin, 2016). Moreover, the different channels of the
company which is inclusive of the websites along with offline marketing are the two
significant prospects that can help offer the various services to the clients.

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The cost and revenue streams of the company are the other aspects which should be
maintained by the company as there is the inclusion of the commission as well as the
additional costs related to the different kinds of operations which can successfully operate the
business and gain competitiveness (Marín et al., 2017). The various vendors who are the
primary customers of the company need to be considered by the company as it will help in
managing the usability.
C. Critical success factors
Firstly, the compliance along with the security which is provided to the customers
while using the respective application is beneficial in differentiating themselves from the
other competitors present in the market. It helps provide a platform which is automated with a
high level of security as it will be helpful to gain competitiveness (Morabito, 2017).
Moreover, it is the ease for the different onboard merchants that can prove to be
beneficial for Afterpay Touch to complete the various financial services in a click and it helps
them in competing with the other competitors (Schaltegger, Hansen & Lüdeke-Freund, 2016).
D. Downside risks
The different risks which can affect the business of Afterpay Touch Financial services
provider are as follows:
The vulnerable nature towards the risks along with frauds related to the offering of
financial services to the customers is one of the main issues which can affect the growth of
Afterpay Touch Financial Services provider (Scholes, 2015).
Furthermore, there is no such application of updating the app which can affect the overall
brand image of the company.

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E. Business model changes
There can be an increase in the communication channels of the respective
organisation as it will help them in communicating with more customers and it will increase
the base of customers and gain competitive advantage.
There should be increased in the overall awareness of the financial services among the
customers in the economy of Australia, and proper usage of the resources is essential to
improve the business operations (Taneja, Pryor & Hayek, 2016).
III. Conclusion
Therefore, from the above, it can be inferred that Afterpay Touch Financial Services
Provider will be successful in successfully managing the different operations by improving
the channels related to communication along with decreasing the risks associated with
security as well as compliance to strengthen their brand image in the market appropriately.
The business model changes can be adopted by the company to enhance the business
operations successfully.
IV. Recommendations
From the above, it can be recommended that the company Afterpay Touch needs to
follow certain aspects to become more competitive such as:
 The customer-centric approach of the company is the first as well foremost approach
which should be managed by them as to provide the utmost security which will be
safe for them to use their services (Toro-Jarrín, Ponce-Jaramillo & Güemes-
Castorena, 2016)

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 The service localization is the other aspect which can be included in the organization
which will increase their value proposition concept
References
Afterpaytouch.com (2019) Afterpay Touch (online) Retrieved from
https://afterpaytouch.com/ [Accessed on 6th April 2019]
Ali, A., Warren, D., & Mathiassen, L. (2017). Cloud-based business services innovation: A
risk management model. International Journal of Information Management, 37(6),
639-649.
Andreassen, T. W., Lervik-Olsen, L., Snyder, H., Van Riel, A. C., Sweeney, J. C., & Van
Vaerenbergh, Y. (2018). Business model innovation and value-creation: the triadic
way. Journal of Service Management, 29(5), 883-906.
Antikainen, M., & Valkokari, K. (2016). A framework for sustainable circular business
model innovation. Technology Innovation Management Review, 6(7).
Bagheri, M., & Movahed, S. H. (2016, November). The effect of the Internet of Things (IoT)
on education business model. In 2016 12th International Conference on Signal-Image
Technology & Internet-Based Systems (SITIS) (pp. 435-441). IEEE.
Biber, E., Light, S. E., Ruhl, J. B., & Salzman, J. (2017). Regulating business innovation as
policy disruption: from the Model T to Airbnb. Vand. L. Rev., 70, 1561.
Burch, S., Andrachuk, M., Carey, D., Frantzeskaki, N., Schroeder, H., Mischkowski, N., &
Loorbach, D. (2016). Governing and accelerating transformative entrepreneurship:
exploring the potential for small business innovation on urban sustainability
transitions. Current opinion in environmental sustainability, 22, 26-32.

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Caetano, A., Antunes, G., Pombinho, J., Bakhshandeh, M., Granjo, J., Borbinha, J., & Da
Silva, M. M. (2017). Representation and analysis of enterprise models with semantic
techniques: an application to ArchiMate, e3value and business model
canvas. Knowledge and Information Systems, 50(1), 315-346.
Davies, I. A., & Doherty, B. (2018). Balancing a hybrid business model: The search for
equilibrium at Cafédirect. Journal of Business Ethics, 1-24.
Gassmann, O., Frankenberger, K., & Csik, M. (2016). Innovation Strategy: From new
Products to Business Model Innovation. In Business Innovation: Das St. Galler
Modell (pp. 81-104). Springer Gabler, Wiesbaden.
Heikkilä, M., Bouwman, H., Heikkilä, J., Solaimani, S., & Janssen, W. (2016). Business
model metrics: an open repository. Information Systems and e-Business
Management, 14(2), 337-366.
Joyce, A., & Paquin, R. L. (2016). The triple-layered business model canvas: A tool to design
more sustainable business models. Journal of Cleaner Production, 135, 1474-1486.
Marín, C. E. M., Contreras, L. D. A., López, A. R. B., & Gaona-García, P. A. (2017,
September). Fuzzy logic system based on canvas model to evaluate the initial viability
of a business proposal. In Workshop on Engineering Applications (pp. 365-377).
Springer, Cham.
Morabito, V. (2017). Business innovation through blockchain. Cham: Springer International
Publishing.
Schaltegger, S., Hansen, E. G., & Lüdeke-Freund, F. (2016). Business models for
sustainability: Origins, present research, and future avenues.

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Scholes, M. S. (2015). Taxes and business strategy. Prentice Hall.
Taneja, S., Pryor, M. G., & Hayek, M. (2016). Leaping innovation barriers to small business
longevity. Journal of Business Strategy, 37(3), 44-51.
Toro-Jarrín, M. A., Ponce-Jaramillo, I. E., & Güemes-Castorena, D. (2016). Methodology for
the of building process integration of Business Model Canvas and Technological
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Valkokari, K. (2015). Business, innovation, and knowledge ecosystems: How they differ and
how to survive and thrive within them. Technology Innovation Management
Review, 5(8).
Whelan, J., & Meaden, G. (2016). Business Architecture: A Practical Guide. Routledge.

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Appendix 1- Table 1- Business Model Canvas of Afterpay Touch
Key
Partners
Vendors
along with
the
payment
providers
Merchants
Key Activities
Proper platform
usability
Security and
Compliance Aspects
Value Propositions
The platform for
payment is secured
for the different
customers present in
the market
Customer
Relationships
The platform
of financial
services is
automated for
the customers
Customer
Segments
Various
financial
institutions
along with
the
vendors
Key Resources
Licensing as well as
compliance
Channels
Official
Website of
the company
Client along
with vendor
websites
Cost Structure
Cost Driven related Infrastructure
Revenue Streams
Commissions along with
late fees and interests
(Source: Created by Author)

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Appendix 2- Table 2- Methods Used by Afterpay Touch Company
(Source: Afterpaytouch.com, 2019)