At time of writing, the share price of Afterpay Touch Group Limited [ASX:APT] has shot up 11% and is trading at $14.44 per share.
It has been a strong year for Afterpay with it posting a 166% return for the year:
Investors are currently looking to see if the company’s ‘buy now pay later’ model can be successfully expanded overseas.
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Afterpay share price up on increased uptake in US market
In big news for the company, it has announced that over 300,000 consumers and 900 retailers have transacted with Afterpay in the US this year.
Additionally Afterpay claims that it has got 1,300 retailers in the pipeline.
The results come after six months of operations in the US.
Similar results took them 24 months to achieve in Australia.
Success in the US market could spell big gains for Afterpay
Goldman Sachs estimates that if it could capture just 3.5% of total customers in the US, it would more than double its current customer base.
We all know that Americans love their credit cards, so if Afterpay makes just a bit of headway in the US it could hit it big.
A potential stumbling block for Afterpay would be regulatory issues stemming from its payments model.
To a degree, it operates in a legal loophole in Australia’s credit laws.
ASIC has flagged this as a point of discussion going forward:
‘Consumers may lack understanding of what fees and charges are payable and … vulnerable consumers may be using these products.’
For now however, things are looking good for the fintech company.
For Money Morning