BNPL Stocks Benefitting from the Boost in Contactless Payments- APT, SPT, SZL

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BNPL Stocks Benefitting from the Boost in Contactless Payments- APT, SPT, SZL

 BNPL Stocks Benefitting from the Boost in Contactless Payments- APT, SPT, SZL


  • COVID-19 has created a paradigm shift in the payment modes with heightened cashless transactions.
  • Big Banks like National Australia Bank are coming into the picture for upgrading cashless payment limits to minimise the scope of physical contact while shopping.
  • BNPL Players have seen significant growth in their underlying sales and revenue.
  • With uncertainty on duration of virus containment, BNPL space is likely to be driven by consumer confidence and income growth in near to mid term while social distancing restrictions seem to be the new normal for the entire year.

While coronavirus has become major threat to the global economy & financial markets, Australia is racing ahead in the fight against virus backed by dedicated fiscal stimulus and monetary policy initiatives.

AU has reported 7,195 cases to date with 103 deaths, while 6,614 have recovered from the infection.

Following strict social distancing norms, people are preferring cashless transactions as a precaution to prevent the virus spread. Digital payments, which were once used for convenience, have now become the necessity in the current times.

Besides, consumers have been doing more shopping online from their homes during the lockdown period, pushing cashless transactions.

As per evidence, the amount of cash withdrawn from ATMs has gone down by around 1/3rd since the COVID-19 outbreak. People have increasingly switched to alternative payment methods such as tap cards, online purchases, buy now pay later (BNPL) and payment via smartphones.

Also Read: How Technology has Transformed the Australian Payment System?

Many big banks like National Australia Bank (ASX:NAB) brought changes to contactless payment limits during COVID-19 to reduce the physical contact at the time of shopping. The payment limits would increase from $100 to $200 for personal and business customers.

In this article, we would look at a few ASX listed BNPL stocks that have seen a boost in contactless payments during this period.

Afterpay Limited (ASX:APT) Up ~70% Over Last 1 Month

Pioneer of BNPL sector, Afterpay (ASX:APT) witnessed strong performance across its business during Q3 FY2020 (period ended 31 March 2020) with underlying sales growth of 105% as compared to the previous corresponding period, primarily supported by growth in the US and continued significant contribution from ANZ.

US performance remained strong in Q3 FY20 with the level of underlying sales broadly in accordance with Q2 FY2020 in spite of the seasonally softer retail market.

Image Source: APT's report

While active customers grew 122% to 8.4 million, active merchants also reached 48.4k globally by the end of Q3 FY2020.

As per the recent update provided by the company on 21 May 2020, Afterpay has crossed 5 million active customers in the US, while ~9 million people have joined the platform.

Post bottoming out at A$8.90 on 23 March, the stock has soared ~430% to A$47.70 as on 1 June 2020 (2:17 PM AEST).

Splitit Payments Ltd (ASX:SPT) Records Accelerated Growth in April

Leading global instalment payments solution business, Splitit Payments Ltd (ASX:SPT) grabbed headlines with its encouraging quarterly update for the three months ended 31 March 2020.

  • Merchant sales volume (MSV) improved by more than 18% to US$23.7 million as compared to the previous corresponding period (pcp).
  • Revenue improved by 104% to US$657,000 on pcp.
  • Operating expenses during the period was $3.7 million, with net $10.34 million cash on hand.
  • Total merchants increased by 108% to 862.
  • Active shopper grew by 2% to 107,000.
  • Average order value increased by +57% to $737.
  • Entered global partnership with Visa and Stripe.

Growth in April 2020:

Merchant sales volume accelerated to record levels in April after COVID-19 slowdown in March, driven by new large merchants onboarded in Q1 and heightened customer inclination, while 90% of Splitit volume has been eCommerce/mobile.

The average order volume, after a reduction of 10% in March during the initial COVID-19 impact, bounced back in April 2020.

Image Source: SPT's report

Business Outlook:

  • SPT experienced a record start to Q2 in spite of the existing global challenges, and expects to continue faster growth in MSV, Revenue and Customer metrics.
  • Merchant demand is seen increasing, thereby improving the merchant shopping cart conversion.
  • Business would focus on the acquisition of large merchants, that is expected to support MSV and revenue growth.
  • Steps would be taken to execute new strategic partnerships and activate existing partner agreements and integrations.

SPT shares are trading at A$0.495, up 6.5% on 1 June 2020 (2:49 PM AEST).

Sezzle Inc (ASX: SZL) Soars More than 30% over Last One Month

Sezzle Inc (ASX: SZL) is a rapidly growing fintech company that aims to financially empower the next generation. Sezzle platform provides a transparent, inclusive, and seamless payment option by which the customer can take control over expenditure.

Below is the glimpse at company’s Q1 FY2020 results:

  • Significant growth in the Active Merchant base by 27% to 12,715.
  • Underlying Merchant Sales (UMS) increased record level from US$105.1 million quarter ended 31 December 2019 to US$119.4 million in the quarter ended 31 March 2020.
  • The number of active customers grew more than 25% QoQ and exceeded 1.1 million.
  • Net cash and cash equivalent by the end of March 2020 quarter was US$36.625 million.

Image Source: SZL's report

SZL shares traded at A$2.00 on 1 June 2020 (2:49 PM AEST).


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