Bonus items for BNPL Players: APT, Z1P, FXL

Summary

• Fintech industry has grown significantly in the past two years, and the fintech adoption rate in Australia has reached nearly 58%.
• Several players from the industry have noted a rise in the active customers, validating the increased adoption during the ongoing COVID-19 crisis.
• FXL announced that the customers using its payment solutions had exceeded 2.1 million, while Z1P also reached 2.1 million customers with a 63% YoY growth.
• APT’s Clearpay crosses the 1 million mark in active customers in the UK within a year of launch.

COVID-19 has opened enormous opportunities for companies that are part of the fintech industry as people during the crisis shifted towards cashless transaction to prevent the spread of the virus. In the present scenario, one could say that the fintech industry would have a brighter future post the COVID-19 crisis ends.

With online retail rising and online subscription services gaining traction, fintech space is benefitting in the present environment.

A report from E&Y released during May 2020, highlighted that over the past two years, the adoption of fintech tools in Asia had increased substantially. As per the latest EY Global FinTech Adoption Index, a survey of 27k digitally active customers in 27 markets revealed that Asia leads the world regarding FinTech adoption.

In Australia, fintech adoption stands at 58%. In mature markets like Australia and Japan, advanced Fintech systems have now become a part of their daily lives.

During COVID-19 crisis, because of the increased adoption of financial technology, many companies from this industry noted an increase in active customers.

Do Read: Digital Trade: The Next Big Thing at Global Level

In this article, we would look at three such fintech companies which reported an increase in active customers.

Afterpay Limited (ASX:APT)

Clearpay, a part of the Afterpay Limited Group, announced on 23 June that the number of active customers had reached 1 million in the UK.

The purchasing frequency in the UK was outperforming that of the US when it was at the same phase of the lifecycle, with clients transacting over eight times within the first year compared to the US which was at times during its first year.

The milestones have been attained after launching in the UK a year ago. Thus, these achievements have made Clearpay amongst the fastest growing e-commerce payment companies in the European market.

There are over 1,100 brands and retailers who offer or are in the process of providing Clearpay to their customers. Further, Clearpay continues to have a robust pipeline of the UK leading merchants providing the payment platform.

Amid the COVID-19 crisis, Clearpay noted that the customer adoption rate was strong. In May 2020, Clearpay had over 3 million app and site visits. Its Shop Directory added more than 1.5 million lead referrals to its retail partners.

Did You Know: Afterpay Attains 5 Million Active Customers in the US Market

Stock Information:

On 24 June 2020, APT shares last trade at A$59.380, up 0.355% from the previous close. APT has a market cap of A$15.85 and ~267.92 million outstanding shares.

Zip Co Limited (ASX:Z1P)

Zip Co Limited, the leading player in the digital retail finance and payments industry, reported 63% growth in its customers to 2.1 million in May 2020, as compared to April 2020.

In the trading update for May 2020, released on 12 June 2020, the monthly revenue increased by 78% YOY to A$15.6 million. The monthly transaction volume increased by 63% to A$189.3 million YOY. The number of merchants surged 46% to 23.6k.

Trading Update:

May 2020 was a strong month for Z1P as the performance of the business with respect to strong transaction volume and outstanding repayment performance, demonstrates the robust business model of the company.

The product offered by the company is quite flexible and is a strong point of differentiation. These products have supported millions of Australian in handling their day to day expenses.

Global Expansion with the Acquisition of the QuadPay:

On 2 June 2020, Zip Co Limited announced that it entered into a deal to acquire the remaining shares of QuadPay Inc, which is a New York-based BNPL company for scrip consideration. As per the agreement, the shareholders of QuadPay would be entitled to receive up to a maximum of ~ 119 million fully paid ordinary shares of Z1P.

With the acquisition of QuadPay, Z1P would have access to the world’s largest retail market (US$5+ trillion and more than 15 times the size of Australia) during the period when interest-free instalments are changing the route people used to follow while making payment.

Further, post the completion of the acquisition, the combines group would have operations across the world in countries like AU, NZ, US, UK, and SA.

QuadPay was founded in 2017, and its model has demonstrated significant growth since then. By March 2020,

QuadPay had nearly 1.5 customers and 3.5k merchants. QuadPay was one of the first BNPL company to utilise virtual card technology in alliance with Stripe, which shows its strong culture of innovation.

Stock Information:

On 24 June 2020, Z1P shares last traded at A$5.900, down 0.338% from the previous close. Z1P has a market cap of A$2.31 billion and ~390.39 million outstanding shares.

FlexiGroup Limited (ASX:FXL)

FlexiGroup Limited offers flexible & smooth payment solutions like leasing, vendor finance programs, interest-free cards, instalment plans, white-label financing solutions as well as other finance options.

On 23 June 2020, FlexiGroup Limited announced that it has over 2.1 million interest-free instalments customers. In the 11 months to May 2020, more than 380,000 new customers were added. With this, the company has positioned itself amongst the largest instalment players in the combined Australian and New Zealand market in terms of the number of customers and volume.

The growth was driven by the continued expansion of ‘humm’ and the company’s strategic partnership with Mastercard, which powers its interest-free instalment products and let consumers go shopping wherever Mastercard is accepted.

Further, the transformation of FXL’s digital offering witnessed more than 600k app downloads. The increasing brand presence is forcing clients to use one of its payment products, whether it is for a small everyday item or one of life’s more significant purchases.

Stock Information:

On 24 June 2020, FXL shares last traded at A$1.375, up 3.383% from the previous close. FXL has a market cap of A$524.54 million and ~394.39 million outstanding shares.