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Afterpay In Regulator Crosshairs Over Compliance Issues

Buy-now-pay-later provider Afterpay has revealed federal regulators have raised issues over the potential for terrorism funding and money-laundering.

Afterpay provided an update to the ASX yesterday, revealing it is “appointing a leading professional services firm to conduct an independent review” of its anti-money laundering and counter-terrorism financing framework.

The company said it’s “in dialogue” with the Australian Transaction Reports and Analysis Centre (AUSTRAC) after the Centre raised compliance issues.

Afterpay said it hasn’t identified any money laundering or terrorism financing to date. 

The news seems enough to simmer the company’s other announcements that its sales were up 143% in the 11 months to the end of May, and has shown consistent growth in the number of new customers and active merchants.

Afterpay also announced new partnerships with US merchants as it pushes to expand globally.

Levi’s, O’Neill, and Ray-Ban are among some of the new signees.

Afterpay is also in the process of expanding into the UK under the Clearpay name.

At home, the company said it’s becoming “entrenched” in the retail landscape in Australia and New Zealand, with close to a quarter of new customer growth coming from brick-and-mortar locations.

Afterpay recently added department store Myer and sports-equipment retailer Decathlon to its roster in Australia.

It comes on the back of UBS research suggesting BNPL providers could make up more than half of online sales for some retailers, as retail sales drop.

Analysts estimated Afterpay and Zip accounted for around 16 per cent of the growth in discretionary retail spending in the six months to December last year, according to the AFR.

Financier FlexiGroup recently consolidated two BNPL providers to create the competing humm platform.

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