US Markets

Australia's Afterpay makes inroads in U.S., Britain as losses deepen

Afterpay Touch Group, a loss-making Australian buy-now-pay-later company, said growth in the United States and Britain was exceeding its expectations amid heightened regulatory scrutiny at home.

Adds details on U.S., UK markets, background on audit

Aug 28 (Reuters) - Afterpay Touch Group APT.AX, a loss-making Australian buy-now-pay-later company, said growth in the United States and Britain was exceeding its expectations amid heightened regulatory scrutiny at home.

The company said it was adding 50% more new customers a day in the United States than its daily average in the 2019 financial year, as it posted a wider annual loss of A$42.9 million ($29 million) compared with A$9 million the year before.

In Britain, where it recently launched, Afterpay said it had over 200,000 active customers in its first 15 weeks of trading, more than it had in the United States over the same period.

Overall active merchants in all markets more than doubled over the year to 32,300.

Buy-now-pay-later companies let shoppers buy products in installments without having to go through the scrutiny of applying for a credit card or a loan, and are growing in popularity, especially with millennials. Investors have taken to the sector for its growth potential.

In Australia, the financial crime watchdog has ordered the company to conduct an external audit over suspected breaches of anti-money-laundering and counter-terrorism financing laws. Afterpay said an interim report would be delivered by Sept. 24 while a final report was expected by Nov. 23.

Lawmakers in Australia have also called for tougher regulation of buy-now-pay-later companies, which are not subject to the same oversight as traditional lenders.

($1 = 1.4806 Australian dollars)

(Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Stephen Coates)

((NikhilKurian.Nainan@thomsonreuters.com; Twitter: @NikhilKurianN; +91 806 749 1637))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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