Australian fintech company Afterpay is dispelling the myth that only tech-savvy younger users are prepared to use app-based technology to find alternatives to the traditional major lenders. It says that it has now increased its user base to include pensioners and Christmas shoppers.

The premise of Afterpay is that it allows consumers to purchase an item on finance and pay for it later, but it does so without some of the hefty interest premiums that are typically associated with this type of practice.

Speaking at the Intersekt conference run by Fintech Australia, Afterpay Executive Chair Anthony Eisen commented that ‘banks have fallen off their pedestal’ due to the fallout caused by the revelations from the Royal Commission inquiry into financial misconduct in the finance industry.

Eisen said this means that ‘a new generation of customers is trusting a new generation of financial services.’

He told media reporters that Afterpay has been able to build a strong brand almost entirely on trust and the fact that it has more transparency than major lenders, which has enabled it to serve 2.4 million Australians.

Referring to finance, he said: ‘I think trust is fundamental to any old model’ and stated: ‘The huge receptiveness of customers to services like Afterpay is because they feel a different trust value is involved with it.’

The Senate has confirmed that it is looking into the possibility of investigating the mechanisms of companies such as Afterpay, with fintechs having evaded inquiries so far. With efforts to try and bring these companies in line with regulations, it appears that no entity in the financial sector will miss out eventually.

Eisen used his keynote speech to confirm that he felt this was necessary, telling the audience: “The important thing for us is to work closely with regulators, with lawmakers and with the wider community to explain who we are and what we do.”

He also feels that his company, which is listed on the ASX, found that a general distrust of credit cards had caused many to seek out alternative forms of lending and allowance to capital. Around 80% of Afterpay’s customers are people using debit cards rather than credit.

Afterpay based its financial model on gaining money from retailers and suppliers rather than customers, taking between 4% and 6% from each sale. Typical credit card charges are around 2%, but the level of distrust in major financial products appears to have caused a general sea change to take place.

Eisen said that retailers seem to trust this process, as they are paid the day after any purchase by Afterpay and are not stuck for liquidity in the way that a typical process would allow for. He also claimed that one of the company’s key benefits is exposing customers to new markets and products that they may not otherwise see.

Although the share price is clearly buoyant compared to last year at a 116% increase, the news of a Senate inquiry almost halved Afterpay’s shares from an August high, as they dropped from $21.13 to $11.48.

At present, it makes a quarter of its income from charging late fees from payments but said that it is trying to find ways to reduce this. With the company’s assertion that it is converting non-tech-savvy users more frequently, it appears that fintechs are starting to see more mainstream traction.