A Decade Post-Recession, Change in Millennial Spending Habits is Evident

Millennials have adopted a different approach to spending, distinct from that of their parents and grandparents, largely influenced by the current economic landscape they navigate.

Given the financial aftermath of the recession, millennials exhibit caution towards credit usage, driven by the substantial burden of student loans and credit card debts. Nick Molnar, the CEO of a rapidly growing fintech company in Australia, recounts the impact of the 2008 financial crisis on his generation, stating that the prevailing advice was to avoid spending beyond one’s means. In response, millennials have shifted their spending patterns, choosing to use their own money for purchases to steer clear of credit liabilities and interest charges, as noted by Nick in an interview with Business Insider.

In light of this economic context, Nick introduced Afterpay, a platform enabling users to make immediate purchases and settle the payment at a later date through manageable installments. For instance, a $50 shirt can be purchased with weekly payments of $10 over five weeks. The service is cost-free for consumers, as its revenue stream is based on retailers who allocate 4%-6% of each transaction to Afterpay. This mechanism empowers millennial consumers to access products they might usually find unaffordable while simultaneously driving business for retailers.

Afterpay has gained significant popularity since its inception and has expanded its services to the UK and US markets. More than 6,500 retailers, including prominent brands such as Levi’s, have joined the platform in the past 15 months, indicating its widespread acceptance.