Merchant finance at point of sale is proving a lively sector, with recent start up Afterpay sprinting toward an ASX listing.Afterpay is selling A$25 million in new shares, giving investors a 15 per cent stake in the company, which would then have a market capitalisation of $165 million. The prospectus for Afterpay shows it lumbered into business as recently as June 2015.Afterpay is in a classic niche seemingly left vacant, at least in online retail, by the financiers that dominate this form of funding at the point of sale.Latitude and Flexigroup, two firms operating in the same sector, do not even score a mention in the Afterpay prospectus.Instead the rhetoric, set out by founder and executive chair Anthony Eisen, follows language chosen to fix its roots amid the fintech hoopla."Afterpay is a technology driven payments company that facilitates online commerce between retail merchants and end-customers," Eisen opened."Our current product is very simple - we allow end-customers to 'buy now and pay later' without taking out a traditional loan or paying upfront fees or interest. Retail merchants are attracted to Afterpay because we help them to increase sales and average order values," Eisen wrote, an affirmation of the Flexigroup model.The interest rate embedded in this form of finance approaches 20 per cent and promises wide margins if well managed."Afterpay pays the retail merchant upfront and assumes all non-payment risk," Eisen wrote, laying weight on the credit risks, the hardest part of the business to manage.This will be the work of a crew led by managing director Nicholas Molnar, a jewellery entrepreneur who helped steer a family business into digital retailing.Banking experience on the board takes the shape of David Hancock, a former CBA executive general manager, who held "a variety of roles including capital markets, fixed income and equities," Afterpay said.Losses are piling up at Afterpay: $39,000 over its first few months and then $1.3 million over the six months to December.Annualised underlying sales funded by Afterpay it put at $13 million, not bad for one year's work and maybe the foundation of something much more.