Buy-now pay-later giant Clearpay is shutting down its EU operations and could lay off all its European staff due to “tough economic trading conditions” in the bloc, City A.M. can reveal.
In a letter to customers yesterday, seen by City A.M., Clearpay said it would begin to wind down its operations in France, Italy and Spain from the 27th June after “a period of consultation in the region”.
The platform is set to stop taking on new customers from the 3rd July and will shut down its entire EU operation from the 25th August, the letter said.
“We’ve made the difficult decision that as of June 27th 2023, Clearpay will begin the wind-down of all operations in France, Italy and Spain,” a Clearpay spokeswoman told City A.M.
“We’ve done this after careful consideration, and in consultation with our employees and other key stakeholders after facing tough economic trading conditions in the EU.”
The firm added that the decision to leave the markets had “not been taken lightly”.
Clearpay declined to comment when asked by City A.M.’s whether all its jobs in the region would be lost.
Clearpay’s operations in the UK are unaffected by the EU withdrawal, while its operations in North America, Australia and New Zealand, where it is known as Afterpay, will continue as usual, the firm said.
Clearpay made its first foray into the EU in early 2021 after it snapped up local firm Pagantis in a $50m deal, giving it ready-made access into the markets.
Bosses said at the time the move would allow it to tap into “a large millennial population and a strong fashion and beauty market, not to mention significant debit card usage and an addressable ecommerce market which exceeds €150bn”.
Clearpay itself, which was founded in 2014 as Afterpay in Australia, was snapped up by Jack Dorsey’s payment behemoth Block in August last year.
Use of buy-now pay-later tools exploded in 2020, but the about turn on the continent underscores the troubling environment for fintechs.
Some of Clearpay’s buy-now pay-later peers, including Klarna and Laybuy, have been forced to lay off chunks of their workforce amid the poor economic climate.
Regulators globally are also tightening the screws on the sector amid fears shoppers are turning to such companies amid a cost of living crisis.