Australian (ASX) Stock Market Forum

APT - Afterpay Limited

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Sdajii said:
Yep, it's shaping up nicely (or, well, neatly). I wouldn't be buying in at the moment.
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I was waiting to buy it and almost did with the price surge yesterday but thought to see if it will ease a bit today to buy it. Well it did a bit more than easing ! Ditto, will wait...
 
aus_trader said:
I was waiting to buy it and almost did with the price surge yesterday but thought to see if it will ease a bit today to buy it. Well it did a bit more than easing ! Ditto, will wait...
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Yesterday was quite a surprise, but it formed the right shoulder quite clearly and set things up for bad times over the next few days/weeks, confirmed almost 100% today. However you look at it, there seems to be short term pain ahead. If you believe in the fundamentals, it should produce some good buying opportunities later this month and likely next. Tomorrow should see a further fairly strong drop.
 
I wonder if the external auditor, may find something, that may not be connected money laundering?
After the banking Royal Commission, I guess there may be a thorough check of the business model. Just a thought on my part.
 
How would people launder money with Afterpay? Purchase good - use dirty money from bank accounts and then they’re good / on sell the good again?
 
Don't you hate it when terrorist organizations are funded by sending them dresses, t-shirts, and cosmetics bought via Afterpay?
 
sptrawler said:
I wonder if the external auditor, may find something, that may not be connected money laundering?
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I'm hoping it's more of a compliance issue than actual real ml going on. Afterpay would have to be one of the worst ways to attempt to money launder. You can only pay up to $1000 ($1500 later).
You need to pay off your afterpay balance from funds from a bank. That bank has anti-ml procedures in place already. You're buying consumer goods, so somehow you'd need to turn that back into cash. I can't imagine anyone doing this.
 
I am also racking my brains how it could be a problem. The only thing that I can come up with is false Id's. Maybe it enables crims to hide how much money they are spending.
 
https://www.theage.com.au/business/...c-money-laundering-audit-20190613-p51xff.html

Afterpay founders under scrutiny with AUSTRAC money laundering audit
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By Colin Kruger
June 13, 2019 — 6.08pm

Afterpay’s board, including the founders who sold more than $100 million worth of shares this week, will come under scrutiny after Australia's financial crime watchdog AUSTRAC demanded an external audit of its compliance with anti-money laundering and counter-terrorism financing laws.

"The audit will help identify if Afterpay has developed and implemented the systems and controls it needs to ensure it complies with its obligations," AUSTRAC chief executive Nicole Rose said in a statement on Thursday.

She added that AUSTRAC “will not hesitate to take action where an organisation is failing to appropriately protect itself and Australia’s financial system from criminal activity”.

The notice served to Afterpay by AUSTRAC states the regulator has "reasonable grounds to suspect that Afterpay is a reporting entity that has contravened and/or is contravening sections 32 and 81 of the AML/CTF [anti-money-laundering and counter-terrorism financing] Act".

The two sections relate to the requirement to identify customers and maintain an AML/CTF program.

In April last year, Afterpay was forced to change its processes after a report from Ownership Matters detailed how minors could use the service to $300 of alcohol with an account registered to Mickey Mouse.

The external auditor will look into matters dating back to January 19, 2015 “including senior management/board level involvement” with the company’s decisions regarding the drafting and approval of “all versions of its AML/CTF program” and the company’s general compliance with the related laws.

The notice said the audit report must include details of any provisions of the AML/CTF Act that the “external auditor concludes Afterpay has not complied with or is not complying with”.

Afterpay's shares plunged as much as 12 per cent to a low of $22.55 on Thursday – below the $23 which investors paid for their shares in the company's $317 million capital raising on Monday.

The company's co-founders David Hancock, Anthony Eisen and Nick Molnar also conducted a sell-down of their combined stake worth more than $100 million, timed to coincide with the capital raising. There is no suggestion that the co-founders' sell-down was prompted by the AUSTRAC notice.

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Afterpay disclosed in a market update last week, ahead of the capital raising, that it was being scrutinised by AUSTRAC for possible breaches. In a response to the regulator's notice on Thursday, it said it did not know of the regulator's decision to order an external audit until it was received on Wednesday evening, but noted that the risk of this had been "previously identified".

"Beyond the update as to AUSTRAC's issue of the notice, Afterpay does not currently have any material information which is in addition to the disclosures made in the investor presentation released to the ASX on June 11, 2019, and the risk factor regarding AML/CTF laws," it said.

The news rattled listed fintech stocks like Prospa which plunged 7.3 per cent to $3.80, just above its IPO price of $3.78. Afterpay rivals, Zip Co and Splitit, each closed 5 per cent lower at $2.87 and 69.5c respectively.

Zip Co told the Sydney Morning Herald and The Age that it conducts credit and ID checks on every applicant utilising numerous independent data sources to verify the identity of all applications.

"There is no current dialogue with AUSTRAC in relation to Zip AML/ CTF policies," it said.

According to the AUSTRAC notice, which Afterpay lodged with the ASX, the company has 14 days to nominate three or more external auditors which the regulator will consider.

Within 60 days of the external auditor being engaged, Afterpay must provide AUSTRAC with the auditor’s preliminary findings, and a final audit report must be ready within 120 days.

The audit will be conducted at Afterpay’s expense.
 
Toyota Lexcen said:
going on smh article, section 32 & 81 of Act not being followed

identification
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I can't see how the model is sustainable in its current form, if they're required to ID every applicant.

Taking 20 minutes to ID a person, to buy a $40 pair of pants seems ridiculous and unworkable
 
Could it also be fake retailers?
A good way to wash funds from stolen credit cards, especially is you only need 25% down as a new customer in the first two weeks.
 
omac said:
Could it also be fake retailers?
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In theory. But unlike accepting credit card payments, APT has only signed up more major retailers, as far as I know. You won't be buying your newspaper at your local milk bar on afterpay anytime soon.
 
OK, fully formed H&S after yesterday. It is still sitting above the neckline around $22, so there is still a chance of a bounce off the neckline, mind you I wouldn't be rushing to buy just at this stage, brass balls award to anyone who does! :D

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Zaxon said:
In theory. But unlike accepting credit card payments, APT has only signed up more major retailers, as far as I know. You won't be buying your newspaper at your local milk bar on afterpay anytime soon.
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According to the FY18 report and HY19 presentation they added 5500 merchants in 6 months, that's ~40/day. That's the ASX300 and FTSE 250 in two weeks (assuming 5 day weeks), they can't all be major retailers....
 
omac said:
Could it also be fake retailers?
A good way to wash funds from stolen credit cards, especially is you only need 25% down as a new customer in the first two weeks.
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omac said:
According to the FY18 report and HY19 presentation they added 5500 merchants in 6 months, that's ~40/day. That's the ASX300 and FTSE 250 in two weeks (assuming 5 day weeks), they can't all be major retailers....
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Very good point! I imagine this is a very easy way to launder money if you're not verifying the merchant. And the fee is only 4%...
 
omac said:
According to the FY18 report and HY19 presentation they added 5500 merchants in 6 months, that's ~40/day. That's the ASX300 and FTSE 250 in two weeks (assuming 5 day weeks), they can't all be major retailers....
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Perhaps not then. Does anyone know any mom & pop business that accepts afterpay?
 
Zaxon said:
Perhaps not then. Does anyone know any mom & pop business that accepts afterpay?
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I don't think you'll see anyone that's laundering money, advertising that they're registered with Afterpay.

You can submit a merchant enquiry here:
https://www.afterpay.com/en-AU/merchant-enquiry

I've submitted an enquiry, let's see what happens (I assume they would have already altered some of their processes)
 
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