Nick Molnar’s favorite New York City pastime is the evening taxi ride from JFK international airport to Manhattan, a journey best experienced by foreigners via the Williamsburg Bridge; a 7306-foot-long gateway to an uproarious metropolis. Like an old movie reel, its maze of steel supports intermittently intersect the taxi rider’s view of those iconic NYC skyscrapers ahead, a cluster of lights puncturing holes in the curtain of navy-blue sky.
“You drive over [the bridge] and you see the city, and then your blood just goes,” says Molnar over a Zoom call on a Friday afternoon. “My Afterpay co-founder Anthony [Eisen] and I talk about it all the time. That, to me, is very special.”
It’s a moment that announces the ambition of the city. In 2019, Con Edison, the utility company who provides power to New York, estimated that 5,200 megawatt-hours of electricity kept Manhattan lit overnight. Zombie workers trade at all hours of the evening because it’s New York and there’s money to be made. Other lights are kept on to light emergency stairwells or to keep aircrafts from crashing into buildings higher than 20 stories.
But come the arrival of the pandemic in March of 2020, the lights dulled both figuratively and literally as the city that never sleeps slipped into an indefinite slumber. Restaurants closed. Cinemas fell dark. Broadway shuttered. Times Square echoed. At the time of publication, nearly 34,000 NYC residents lost their lives to the coronavirus. A report in May of 2021 cites 900,000 New Yorkers lost their jobs during this time leaving the economy-and livelihoods-shattered.
Now, 18 months later, and after two seasons of ersatz fashion films and lonely livestreams, New York Fashion Week-presented by Australian fintech brand Afterpay-heralded the return of a robust schedule of in-person shows. Yes, Collina Strada and Proenza Schouler sent their heart-thumping creations down the SS22 runways in front of roaring real-life human beings in New York. The sartorial baton was then passed to the likes of Rejina Pyo and her flirty, floaty skirts at London Fashion Week (of which Afterpay, known as Clearpay in the UK and Europe, also sponsored), before handing off to Daniel Lee and his distinctive Bottega Veneta fringing in Milan, and Virginie Viard with a plethora of iridescent Chanel tweeds in Paris.
The multi-year deal between NYFW and Afterpay will see the buy-now-pay-later platform tip fashion week’s traditional top-down approach on its head. Usually a trade event aimed at fashion editors and buyers alike, Molnar, Eisen and their team piloted 2021’s NYFW to better appeal to the cohort who matter the most: the consumers. This season, fashion lovers were able to shop select looks from the Altuzarra, LaQuan Smith and Maison Kitsune runways digitally from across the US via the Afterpay hub.
In addition, a series of events and activations came to life across the island over the course of fashion week including an immersive drop culture-style shop which popped up in Times Square where consumers nabbed exclusive, limited edition Crocs x Bretman Rock JibbitzTM and JD Sports x Glassface NFTs. The corner of 14th and 875 Washington Street in the Meatpacking district transformed into the ‘House of Afterpay’; a strip of pop-up stores, styling sessions, and was an opportunity for consumers to meet cool, cult brands who don’t usually show at NYFW. On September 10, more than 20 stores from Soho to the Meatpacking district participated in a 24-hour shop-a-thon.
“We gave small businesses exposure in a block-style shopping activation that they wouldn’t have been able to have in a traditional NYFW schedule,” says Molnar. “We’re really thinking about the whole gamete and all ends of the retail spectrum.”
The consumer-led flip aimed to jumpstart a fresh future for New York retail, a space finding its balance again after a year of international visitor foot traffic being virtually non-existent.
“You think about the impact that NYFW has on the New York economy: it contributes about $US900 million in jobs, in tourism, in trade etc.,” explains Molnar. “It’s been devastating times. But to be able to bring a consumer base to New York-a consumer that is so excited to meet brands and shop and start to get their lives back on track – is a real privilege.”
“The ability to do this at this time was principally-and from a values perspective -really important to Anthony and myself, and our whole organization,” he continues. “NYFW and LFW are such moments of hope where we could literally turn the lights back on.”
On this note, you may have noticed Molnar and Eisen lit up the Empire State Building “Afterpay Bondi Mint”, a bespoke green hue patented by the globally renowned color institute Pantone.
The building which is usually lit in its signature white, has been known to turn blue and orange for the New York Knicks, or a dynamic red to honor the heart of NYC’s fight to beat COVID-19. But “Bondi Mint” for an Australian company? Locals would say it sounds as likely as the F train arriving on time, but somehow these guys did it-and that minty tint was visible to a new crop of dreamers journeying across the Williamsburg Bridge on evening this past September.
Yes, at just 31 years old, Molnar is making his mark on the world. The story of how he got here is one of smarts, game, and a fateful relationship with a next-door neighbor.
“In high school I was always kind of wheeling and dealing, whether it was selling chocolates for charity, or helping my business teacher sell his motorbike on eBay,” recalls Molnar of his days at Moriah College in Sydney’s Queens Park in Australia.
“I was good at mathematics, I was good at computers, and I’d say I really applied myself in year 12,” he says laughing, noting that he was also playing a lot of rugby league and made the teams for the Sydney Roosters under 17s and under 18s.
During his time at Sydney University where he studied a Bachelor of Commerce majoring in finance and international business, Molnar started selling excess stock from his parent’s jewelry company on eBay. Within 12 months, he was the site’s highest-selling Australian jewelry retailer.
But it was the late nights spent packing inventory for buyers that sparked curiosity from his former next-door neighbor (and now Afterpay co-founder), Anthony Eisen, who was the chief investment officer at an investment holding company at the time, and is 18 years Molnar’s senior.
“[Anthony] legitimately approached my father one day when he was taking the rubbish out and he said, ‘I don’t mean to pry but I see your light on upstairs every night, what do you do?’,” says Molnar. “My dad, being an entrepreneur, just latched onto this because Anthony had a chance at getting me a job.”
The pair struck up a unique friendship.
“I think [Anthony] was incredibly kind and thoughtful in the way he’d be consciously guiding me through a job interview or a business model I was building. He gave me an internship at his company just to teach me,” says Molnar dressed in a nondescript white tee, toying with a pen as he reflects back on his idol. “Seeing Anthony in the boardroom and how much respect he got from the moment he walked into the room, and how articulate he was-I was a 20-year-old kid at university looking up to this guy as a stereotype for what I should become.”
“Fortunately the investment banks didn’t hire me despite all of Anthony’s help! [Laughs],” he adds. “And then one thing led to another. I was an entrepreneur, he was the stereotype of what I should become, and he ended up being an entrepreneur with me. It was amazing how it all did a full circle. It was fate.”
Molnar presented two ideas to Eisen, one of them was Afterpay: a company who would cover the cost of a product upfront and ask the customer to pay back the amount in four interest-free instalments over a six-week period. In turn, merchants would pay a 4% fee per transaction (four times more than credit companies) to see a crop of new customers willing to pay full price, and, most importantly, putting more in their shopping carts.
Eisen liked “this Afterpay thing”, a name coined by Molnar’s aunt.
“The idea was really born from the functions of two things; one was selling jewelry online out of my bedroom. I just had this deep respect for retail,” says Molnar. “Jewelry is a very hard product to sell online. Basically, out of 100 consumers that come to your website, only one makes a transaction. You can pay for marketing, you can build a whole lot of these engagement mechanisms, but 99.5/100 people leave.”
“Then growing up during the 2008 financial crisis, I saw this shift away from credit to debit in this Millennial cohort,” he continues. “It was the alignment between these two components where I thought, ‘What if we engaged this next-generation consumer in a different way?’ And that was what led to the ‘A Ha!’ moment.
”The post-financial crisis period saw an increase in credit card ownership and spending. Yet, quietly in the background Millennials (like Molnar) and some older members of the Gen-Z cohort were busy saving their money. Today, as the world comes out of a second crisis in the coronavirus pandemic, data is showing the two groups are more debt-averse to credit than ever before.
“If you look back to the middle of the pandemic in May 2020, credit cards had -21% YOY growth, and debit had +12% YOY growth,” says Molnar. “There’s meaningful savings in the economy right now, the spend of debit is growing at a rate that hasn’t been seen since the 2008 financial crisis.”
But Molnar says there’s a really important component to this: Generationally, there’s a distinct difference in how people spend their money with two out of three Millennials in Australia, the US and the UK not owning a credit card anymore.
“In five, six or seven years time, they are going to earn half of all income in the economy,” he says. “All of a sudden, this trend is compounding each year as the Millennial group’s income grows, and their percentage of discretionary spend is so meaningful that it’s becoming the trend. If you look back at 2008, this trend was present but it wasn’t showing up in anyone’s data because the group wasn’t earning enough income to make a difference.”
Interestingly, Molnar says the largest shift away from credit during the pandemic was Gen X and older. “We’ve always had this belief that Millennial and Gen-Z consumers influence the masses and you’re seeing that happen now in this world.”
In a poll conducted by Afterpay in September of 2020, 56% of American adults surveyed (and 55% in the UK and 60% in Australia] say budgeting has become more important to them compared to before the pandemic. Further to this, 47% of American adults surveyed (and 47% in both the UK and 53% in Australia) say avoiding credit products with interest has become more important to them during this time.
But when Molnar landed in the US to meet with investors about Afterpay, the feedback was, “It isn’t going to work, America is a credit-driven society”. As he puts it, the reality of that is true, but only for a particular generation outside of the Millennials and Gen-Z cohorts. The investors knew this. They just didn’t have an alternative.
“It was really interesting because you have these incredible direct-to-consumer brands or retailers that built their businesses with relationships on this next-generation consumer and when I spoke to them about our value proposition, they said, ‘Oh yeah, I get it, I know there’s debit card demand, I see it in my own numbers,’” says Molnar. “They were so ahead of the curb in understanding the shift, they just didn’t have a solution that helped them engage with this consumer that aligned with their preference for debit over credit.”
“The size of that market is so significant,” he continues. “We went from zero to one billion a month in volume in less than two-and-a-half years in North America and it was led by this next-generation of retail that understood the trend better than anyone else and lent into it. Our adoption curve of the US has been far faster than what we were ever going to achieve in Australia.”
When it comes to competitors, Afterpay have no shortage. The lion share of the market monetizes primarily from the consumer, whereas Afterpay make their money from the retailer.
“It translates to a very different relationship that you’re able to build with that customer and the brand, and it means that we can send a million leads a day to our retail partners and act as one of their most meaningful customer acquisition channels,” explains Molnar. “Yes, we’re a payment product but we’re also driving marketing value to those partners, and that is actually the core value proposition of Afterpay. We can do that without ever charging interest, without ever doing a credit check. You have these players in the space that are still tapping into the credit file, but this consumer uses a debit card and the consequences of that is that they have a really light credit file, even though they’re very worthy of credit. They just are spending differently and are not building credit overtime.”
This sweet spot won over those U.S. investors. On August 2 of 2021, six years after its arrival in the market, Afterpay merged with US payment giant Square (co-founded by Twitter’s co-founder and CEO Jack Dorsey) in a deal worth $29 billion, making it Australia’s biggest ever buyout.
Molnar admits he had never actually attended Fashion Week in New York prior to September.
“I would go to New York when I was selling jewelry. I was this young entrepreneur trying to find cheap hotels in the city for my meetings and it would be like, ‘There’s no availability,’” he recalls. “Whenever I found the hotels were booked out, I knew NYFW had arrived. The buzz of the city turned on. So that’s my entrée to the event. To get behind the doors now is really exciting.”
He’s right. During NYFW, an extreme degree of energy exists in the streets; hotels are booked out. The shows on Spring street are loud. Heels clop on the uneven pavements as paparazzi clusters yell for the attention of seemingly very important individuals. Celebrity sightings are aplenty. Taxi horns battle one another. The fashion is inordinate and fabulous. The dinners are fancy and fun. The lines to get into the thumping parties inside Public Hotel on Chrystie are long but worth it. And no matter how many times a magazine editor has flown into the fashion capital to cover the shows, the big lights on those skyscrapers still inspire.
As the New York Times writer Roger Cohen wrote in a now very famous column published in April 2020, “When, when will New York come back? It’s a city of energy. Energy defines New York. And how will that energy reconstitute itself?
“Just come back New York, just return, please,” writes Cohen in his column. “I know we can make a deal.”
Molnar has made many deals to get to where he is. But the one he made with New York might just be one of his brightest yet.
