Detailed Analysis of Afterpay's Business Model Canvas Report

This report provides a comprehensive analysis of Afterpay's business model, employing the Business Model Canvas framework to dissect its key components. It examines customer segments, including merchants, retailers, and individual shoppers, and explores Afterpay's value proposition, emphasizing multi-payment options and secure transactions. The report details key activities such as security in transactions and research & development, while also analyzing the channels utilized, including websites and social media. Revenue streams, primarily commissions and late fees, are assessed alongside the cost structure, which encompasses platform development and security expenses. The interrelationships between these building blocks are explored, highlighting the critical success factors such as easy payment options and partnerships with retail firms. Furthermore, the report discusses potential downside risks related to trust and competition, and suggests recommendations for future business model changes, such as expanding partnerships and enhancing innovation.

Running head: BUSINESS MODEL CANVAS OF AFTERPAY
BUSINESS MODEL CANVAS OF AFTERPAY
Name of the Student
Name of the University
Author Note

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Executive Summary
The report is mainly based on the detailed analysis of the business model canvas that has
been developed by Afterpay. The nine building blocks of the business model have been
analysed in the report in detail. The analysis is mainly based on the ways by which the
building blocks have supported the operations of Afterpay. The interrelationships that have
been formed by building blocks and critical success factors are also discussed in the report.
The risks that are faced by Afterpay in its operations in the financial industry have also been
analysed. The recommendations are mainly based on the future operations of Afterpay in the
industry.

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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...........................................................................................................3
3. Value proposition...................................................................................................4
4. Key activities..........................................................................................................4
5. Channels.................................................................................................................4
6. Revenue streams.....................................................................................................5
7. Cost structure.........................................................................................................5
8. Key resources.........................................................................................................5
9. Customer relationships...........................................................................................5
B. Interrelationships.......................................................................................................6
C. Critical success factors..............................................................................................6
D. Downside risks..........................................................................................................6
E. Business model changes............................................................................................7
III. Conclusion................................................................................................................7
IV. Recommendations....................................................................................................7
Appendices.....................................................................................................................9
Appendix 1 – Table 1 – Business model canvas........................................................9
Appendix 2 – Table 2 – Income statement...............................................................10
References....................................................................................................................11

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I. Introduction
Afterpay is a digital service providing organization of Australian origin that mainly
provides support related to the purchase of retail products from different organizations with
the help of small instalments. The consumers are provided with the option to pay the money
within fourteen days of purchasing the product. Afterpay has been able to gain major levels o
popularity in the industry with help of services that are offered to the consumers. Afterpay
was founded in the year 2014 in Sydney and the company had changed the spending patterns
of customers in Australia (Afterpaytouch.com. 2020).
II. Business model
Afterpay has been able to form the business model with respect to the efficient and
effective services that are offered to consumers through small instalments that are related to
products which are purchased. The organization thereby aims at charging late fees based on
failure of the consumers to clear the instalments within the stipulated amount of time.
A. Building blocks
1. Customer segments
Customers segments of an organization like Afterpay mainly includes, the merchants,
various retailers, individual shoppers and business organizations as well. The organization
mainly tries to provide the payment related services to various customer segments with
respect to their demands and needs (Bekhradi, Yannou & Cluzel, 2016).
2. Key partners
The third party merchants, payment providers like Mastercard are considered to be the
key partners of Afterpay who are able to support the organization in proper improvement of
the services that are offered to the consumers. The banks and different other financial

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institutions have also been able to become the key partners who have supported the
operations of Afterpay. The physical and online stores of Afterpay are also considered to be
major parts of the operations developed by the firm (Gonçalves & da Silva, 2017).
3. Value proposition
Value proposition developed by Afterpay is mainly related to the multi-payment,
multi-currency and secure transaction based facilities that are provided to the consumers who
are a part of various online platforms. The organization mainly aims at effective elimination
of costs which are related to development of many stores in various parts of the country. The
proper enhancement of user-friendliness of the app or website of Afterpay is also an
important part of value proposition (Hruska & Maresova, 2019).
4. Key activities
Key activities which have been performed by an organization like Afterpay are
mainly based on the levels of security offered to merchants and different partners of the firm
as well. The proper formation of the effective levels of research and development is
considered to be a major aspect that can influence operations developed by Afterpay. The
organization thereby aims at offering 24/7 support to merchants and the customers of the firm
(Joyce & Paquin, 2016).
5. Channels
The channels which have been implemented by Afterpay are related to the website
that is used by the firm for the purpose of reaching the customers. The online purchasing and
digital activities are also an important part of the channels that are used by the firm. Social
media has also proved to be a major channel that has been implemented by Afterpay in order
to offer its products to consumers. The programs and advertisements that are developed by

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Afterpay can also have an impact on growth levels of the organization (Keane, Cormican &
Sheahan, 2018).
6. Revenue streams
Revenue streams that have been developed by Afterpay are mainly related to the
commissions that the organization has received from the partners and various transactions
that are made as well. Afterpay is mainly able to gain the incomes with respect to the interests
related to the payments and late fees based on lack of proper timing of paying the instalments
(Kristensen & Ucler, 2016).
7. Cost structure
Costs that have been incurred by Afterpay are mainly related to the development of
the online platform of the form and amounts of operating costs as well. Major costs are also
faced by Afterpay with respect to the levels of security that have been formed by the firm
with respect to transactions completed by the organization. The firm also has to make
investments on process of acquiring the customers (Micieta et al., 2020).
8. Key resources
Afterpay has been able to gain major resources that are considered to be interactive
and effective in nature with respect to service levels that are offered to customers. Afterpay
has also been able to gain its position in the industry with respect to the significant methods
that are implemented for the purpose of communicating with the customers. Partnerships
have also been developed by Afterpay in order to provide a major resource related to the
growth of the organization (Murray & Scuotto, 2016).
9. Customer relationships
Afterpay has been able to develop effective relationships with consumers by offering
different benefits that have enhanced the loyalty of the consumers towards the firm. Major

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opportunities that are offered by Afterpay to consumers are also related to the payment that is
offered for the products that are purchased from retail firms (Onken & Campeau, 2016).
B. Interrelationships
Afterpay has been able to develop its operations in the industry with the help of the
nine building blocks that are a part of the business model canvas of the firm. Key partners of
the organization can have an impact of the consumers and the shopping based activities as
well. Afterpay has also maintained the relationships with consumers in order to enhance the
levels of revenues that have been gained in the industry. Afterpay also has to face major costs
with respect to development of the services of the firm and instalments offered to the
consumers as well. Major amounts of resources have also been gained by Afterpay are able to
influence the services which are provided by the organizations to consumers in Australia
(Stenn, 2017).
C. Critical success factors
Afterpay has been able to gain success in the financial industry with the support that
is provided by the easy services and payment options offered to the consumers as well. The
organization has also been able to form the partnerships with retail firms in an effective
manner and this has enhanced the operations of Afterpay. The retail organizations that have
developed partnerships with Afterpay mainly include Mimco, Rebel, Icebreaker, Recreate
Yourself and Running Bare (Woo et al., 2016).
D. Downside risks
Afterpay will face major levels of risks that are related to the levels of trust that the
organization has to gain of the customers in order to offer the services in an effective manner.
The importance of trust and security levels are quite high for the purpose of maintaining the
effective operations of Afterpay. The effective formation of partnerships have also become

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highly important and have an impact on the risk levels that Afterpay can face in its future
operations. The organizations which have their operations in financial industry have to form
the partnerships with various retail firms. The competition levels in the industry have also
been increased with the support provided by the number of partnerships made by the
organization in order to offer effective services (Murray & Scuotto, 2016).
E. Business model changes
Afterpay can aim at implementing changes in the business model with respect to the
enhancement of number of partnerships that can be formed with the retail organizations in the
industry. The innovativeness of the business operations of Afterpay can also be improved in
order to enhance the value offered to the consumers. Revenue streams of Afterpay will be
increased with respect to partnerships formed by the organization with the big retail brands
(Gonçalves & da Silva, 2017).
III. Conclusion
The analysis of the business model canvas of Afterpay has been able to depict that the
operations of the firm have been maintained with the help of effective partnerships formed
with the retail organizations. The changes that can be made in the business model can
enhance the profitability levels of Afterpay in the future and this will also help the firm to
maintain its customer base. The enhancement of competition levels in the industry can also
have an impact on profitability levels of the organization. Afterpay will be successful in
maintaining its position in the financial industry with the help of partnerships formed with
large retail companies.
IV. Recommendations
The recommendations that can be offered to Afterpay for future operations are as
follows,

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Afterpay can aim at increasing its customer base by offering more innovative
services.
Afterpay can increase the number of partnerships that have been made with
the retail organizations in order to enhance the services offered to consumers.

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Appendices
Appendix 1 – Table 1 – Business model canvas
Key Partners
 Third party
merchants.
 Payment
providers.
Key Activities
 Security in
transactions.
 Research and
development.
Value Proposition
 Multi
currency
secure
transaction
platform.
Customer
Relationships
 Loyalty
Customer
Segments
 Business
organizatio
ns.
 Merchants.
Key Resources
 Interactive
online
platform.
Channels
 Website of
the
organizatio
n.
Cost Structure
 Operating costs.
 Security costs.
Revenue Streams
 Commissions.
 Interests and late fees.Source – Created by Author

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Appendix 2 – Table 2 – Income statement
Source – (Afterpaytouch.com. 2020)

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References
Afterpaytouch.com. (2020). Afterpay Touch. Retrieved from
https://www.afterpaytouch.com/who-we-are
Bekhradi, A., Yannou, B., & Cluzel, F. (2016). Importance of problem setting before
developing a business model canvas. In DS 84: Proceedings of the DESIGN 2016
14th International Design Conference (pp. 907-916).
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Canvas for Collaborative Business Models Design. In Advances in Production
Management Systems. Initiatives for a Sustainable World: IFIP WG 5.7 International
Conference, APMS 2016, Iguassu Falls, Brazil, September 3-7, 2016, Revised
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Hruska, J., & Maresova, P. (2019). Design of business canvas model for social media.
In Emerging Technologies in Data Mining and Information Security (pp. 63-69).
Springer, Singapore.
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.
Keane, S. F., Cormican, K. T., & Sheahan, J. N. (2018). Comparing how entrepreneurs and
managers represent the elements of the business model canvas. Journal of Business
Venturing Insights, 9, 65-74.
Kristensen, K., & Ucler, C. (2016, June). Collaboration Model Canvas: Using the Business
Model Canvas to Model Productive Collaborative Behavior. In 2016 International
Conference on Engineering, Technology and Innovation/IEEE lnternational
Technology Management Conference (ICE/ITMC) (pp. 1-7). IEEE.