How these Aussie neighbours became billionaires by outsmarting the big banks | 60 Minutes Australia

seven years ago nick mulner and anthony eisen were neighbors in sydney one day they got chatting as good neighbors do and came up with a simple idea that would ultimately outsmart voracious credit card companies and banks today nick and anthony are not only business partners they're billionaires and that idea they had well it's the financial phenomenon now called after afterpay a revolutionary payment platform that's transforming the way people shop around the world [Music] anthony eisen and nick molner feel very much at home on bondi beach it's where they come to relax and where they've spent time tossing around ideas including the biggest of them all after pay a financial tech business that's made them australia's newest billionaires [Music] i'm going to say it you're billionaires twice over what does that mean to you not a whole lot you never thought 12 months ago our stock price was eight dollars and we were far from you know the word that you use that we never use um but that's just you still feel on knife's edge it doesn't you know it's it it almost sometimes doesn't feel real yeah it's it's not our skin if i can put it that way nick and anthony came up with a simple yet revolutionary plan to reinvent the shoppers friend lay by [Music] fundamentally what we wanted to do was turn a traditional model on its head it's been snapped up worldwide mostly by millennials the 25 to 40 year olds and turned after pay into a company currently worth more than 25 billion dollars but what is extraordinary about this success story is that it might never have occurred if it weren't for the fact that nick molner and anthony eisen were neighbours did you know nick i didn't know him but in my regular job of putting out the rubbish you know you get to meet the neighbours sometimes of course nick didn't put out the rug he was it was his father so you know from across the road we started a conversation and within a little bit of time the conversation went well you need to speak to my son nick with an age difference of 18 years nick 31 and anthony 49 they might seem an unlikely pair the age gap is a plus it seems what are you talking about but in fact they've proven to be a perfect match anthony is an accountant turned investment banker and nick was the kid with plenty of bright business ideas nick why do i read about a black market sushi business yeah yeah i don't know if i'd call it black market i guess it was totally black market um uh look as a from a young age i you know always pushed the boundaries of being an entrepreneur i would you know go to the sushi restaurant uh the day before and buy all their excess stock it was totally off like but people loved to buy my sushi at school the next day so there was always you know the little hustle that was going on um and then it moved into jewellery and i moved into jewellery and that was very successful yeah well my my parents were in jewelry from the moment i was born but you know my mum pretty early on was like hey nick there's this online thing it's starting to to take off like you should you should sell jewelry online and one thing led to another and you know before i knew it i sold the most jewelry on ebay out of my bedroom while at university and you're watching something odd going on next door yeah i mean look then the light was on every night i saw shadows moving around and then lots of boxes with little packages in the morning getting run up to the post office and actually i thought there was a whole lot of not very good things going on at store but it all changed when nick sought out his neighbor for career advice talk of professions evolved into a plan an audacious one what in the world is happening on wall street having watched the impact of the global financial crisis they decided to take on the traditional credit card industry i just turned 18 and the message was don't spend money you don't have and we saw that lay by was hugely present in the australian retail economy like many businesses had 10 of their total transaction volume was product that had to sit in a cupboard where people came and slowly paid it back on time and if they didn't pay it off then this stock now which is well out of fashion is now back on the shelf and can't be sold so we just saw that there was this opportunity to bring the two trends together how long did it take for you both to realize yeah this is a good idea yeah when uh when when a trickle turn to a flood i think is is the answer and it happened pretty quickly and i was like i think that's really good this is terrific people are liking this and i turned to nick and said well look this is this is all our own money here a customer is going to pay us back it was an extraordinary gamble how it works is that customers can buy goods to the value of two thousand dollars take them home immediately by agreeing to pay for them in full equal installments unlike traditional credit cards there are no annual fees and no nasty interest rate charges but if you miss a payment with afterpay you'll cop a late fee and your account will be blocked just open the app afterpay makes its money by charging retailers a commission for its service that can't be added to the customer's bill [Music] that's done how many times have you done this for your wife amy has a sheet on it for herself that's the question so far nearly 15 million shoppers and 86 000 retailers in nine countries around the world have embraced the brand [Music] it is an extraordinary story isn't it yeah a couple of neighbours come together and with a good idea a good idea that they got behind and sold literally to the world um you know it's what capitalism's supposed to be built on people with a new idea a new product they risk their own capital and literally sell to the world the fact that so many people are pursuing it the fact that so many people are leaving credit cards behind and using after pay is literally proof that it's a good idea economist richard dennis says afterpay success has been remarkable and what's more has caught the old school off guard it's almost too good to be true look it is that's right for the consumer no fees and no interest if you pay on time compared to what the banks will charge you on credit cards that's a great deal and that's why it's such a threat to to the big banks and to the credit card companies themselves it's been compelling to watch after pay listed on the australian stock exchange in 2016 quickly becoming one of the top 20 companies [Music] are you convinced that having afterpay on the window is a lure brings them in forget the window i put it on a bus haven't you seen my buses we've got buses everywhere liz justin levis the ceo of australian fashion house q was one of the first to give afterpay a go and saw instant results the fact is it is the biggest payment platform and it's working for our business thousands of australian retailers signed up and very soon after the business went global taking off in america when the kardashians introduced afterpay as a payment option for their customers oh my god and it matches my awesome it's just so much fun how did that happen they filled out our contact form i tried every single angle possible to get through to them and their businesses with failure and then just the moment the stars aligned and they came they came inbound and then i'm sitting out for lunch with my wife and she starts whacking she's like nick nick you won't believe it kim just instagrammed about afterpay because at two weeks we had to answer questions like how much did you pay for that [Laughter] and we didn't and it was purely organic but this stratospheric ride has not come without some uncomfortable bumps particularly when the booming by now pay later industry caught the attention of the australian government you said nick that being a professional athlete uh is not dissimilar to being an entrepreneur uh in that you get a punch in the face every day yeah is that true it's completely true it's still true i mean the punch in the face i think the resilience you need to be an entrepreneur it's it's incredibly intense i bet you're the last person people expect to find driving them around well you know what um i don't come out straight away and say hey you know i'm nick molar's dad there could be no prouder father than part-time uber driver ron molnar who's watched his son nick the co-founder of financial tech company after pay turn a brain wave into a multi-billion dollar business isa love getting the retailers in my car because then i say yeah do you ever have to pay and if they said no i was like the salesman for after pay so i'm the market research guy you are yeah ron is no business slouch either for more than 30 years he owned a jewelry store but since retiring he's become after pay's secret weapon look you know if i got someone who was who was older yeah then more often than not they didn't know what afterpay was anyway you mean people like us people like us lizzy i wasn't going to say that i actually wasn't going to say that but yes liz people like us people like us people like us but did you get people like us over the line yeah i think i did i haven't played this for a while [Applause] inside the sydney headquarters of afterpay the mood is high co-founders nick molnar and anthony eisen are enjoying their little used office toys this is a partnership that warms a father's heart a serendipitous neighborhood connection that was partly ron's doing there's two factors here that i think are huge number one that that anthony's wife talked him into buying that house and number two that my wife put enormous pressure on me to buy our house because that happened this doesn't happen that neighborhood bond that nick and anthony share has helped them ride the highs and lows of building a big business including fronting a senate inquiry into the unregulated buy now pay later industry the maximum amount a customer can have owing is two thousand dollars with some critics claiming it's offering just another credit card service it's impossible for after pay to bankrupt a person for example and we've never enforced a debt um so we don't see ourselves as the straw that breaks the camel's back it looks a bit like a credit company it smells a bit like a credit company but it's not traditional credit works on people being in debt staying in debt and paying interest and in fact those models only work if customers don't pay back straight away our whole proposition is that customers cannot fall into a debt trap so if you miss a single payment with afterpay you can't use the service to make another purchase you know our average transaction value across 15 million customers today is about 150 customers are never in a position where they've got thousands of dollars of debt outstanding so you're not resisting regulation we're not resisting regulation our new industry should be regulated but it shouldn't be a one-size-fits-all approach look all industries are regulated but not everyone needs the same regulation economist richard dennis agrees after pay should be viewed differently to the credit card industry because he says it makes its money in a fundamentally different way of course there are risks with people spending money they don't have that's true whether it's a credit card whether it's after pay whether it's 60 month interest free advertised on tele for a retailer there's all sorts of problems with credit risk in australia and around the world but after pay have come up with a model that that caps fees and doesn't charge punitive interest in ways that i think protect consumers better than the credit card companies and the banks have hey josh how are you going nick it's amazing to see you on the world stage after pay is a financial tech superstar nick and anthony continued to take calls from major brands today from shoe company steve madden in america after pay as an app we're seeing as a great acquisition tool but it's also staying close to its first customers those in the australian fashion trade afterpay's future of fashion runway will showcase uh many of the incredible designers that are in the room today after pay is sponsoring australian fashion week an important nod to an industry that backed them from the beginning giving flight to an idea that stormed the retail world in five years where would you like to be well we actually tried as a leadership team to write a five-year plan and we ended up with a two-year sprint i mean you know we're now competing with the biggest companies in the world they've recognized what we do and how special it is [Music] perhaps only on bondi beach can a couple of local billionaires go unnoticed but in the business world anthony eisen and nick molnar are hard to miss they dared to try something new and are now surfing a massive afterpay wave one they created and had the ticker to ride to a young entrepreneur in the making right here in australia what what's the message well my advice would be to find an anthony eisen you know like you've got to share it with someone it's really difficult to be a lone soldier in this if i go back to where we started you know you can do finance you can do retail you can make toast in the morning and turn off the lights you know we shared all of that we built ikea furniture for our first office you know um the age difference and the experience difference is what gives us our strength i think how do you sum up this marriage it's definitely a marriage uh yeah i speak to anthony first thing in the morning i speak to aunt before i go to sleep you know we talk a lot about being grounded in reality about being humble let's not drink our own kool-aid let's face into the good face into the ugly and ask ourselves the hard questions and i think that fundamental you know relationship has been so critical from the start yeah you just really like him you didn't use the word love buddy hello i'm liz hayes thanks for watching to keep up with the latest from 60 minutes australia make sure you subscribe to our channel you can also download the nine now app for full episodes and other exclusive 60 minutes content

Channel: 60 Minutes Australia

Views: 672,844

Rating: 4.8837976 out of 5

Keywords: 60 Minutes, 60 Minutes Australia, Liz Hayes, Tara Brown, Liam Bartlett, Tom Steinfort, Sarah Abo, karl stefanovic, 60Mins, #60Mins, afterpay, internet, technology, nick, anthony, tech, crypto, kim, kardashian, endorse, cue, australian, riches, story, billionaires, tech genius, friends, partnership, business, asx, stocks, payment, big banks

Id: 02D_aNS5NSc

Length: 18min 28sec (1108 seconds)

Published: Sun May 23 2021

Reddit Comments

[u/Marto85]

I hate all these new ‘afterpay’ options that are literally only designed so poor people and people with spending addictions get themselves into crippling debt.

My issue is that things like afterpay have come out so fast that regulation hasnt caught up.

Whilst what they did was all legal, there has to be some conscious choice made Knowing full well people are going to end up in a financial pit they can’t get out of

[u/stemid85]

Disclaimer: In my opinion this is a disgusting piece of capitalist propaganda so I'm just posting it to see what others think.

All they did was come up with a new way to put working class people into debt, and rich people all over the world loved them for it.

And now 60 minutes Australia gives them this glorifying piece. I mean I could barely believe my eyes, it made my skin crawl.

I just wonder if they're going to start selling that debt off at some point. Because I don't see how they're valued at billions for a company that claim they will not enforce the 2000 AUD debt limit of its customers...