At time of writing, shares of FlexiGroup Ltd [ASX:FXL] are up a whopping 19.3%, increasing by 26 cents during today’s trading.
The spike seems to relate to a retailer update from the company this morning, announcing the newest offer for FlexiGroup’s humm platform — the original ‘buy now, pay later’ provider in Australia.
It seems no coincidence then that the share price of buy-now-pay-later juggernaut Afterpay Touch Group Ltd [ASX:APT] has dropped by over 6% today.
FlexiGroup add lucrative flexibility
According to the update, a multitude of merchants have joined the humm platform, bringing the total amount of humm retailers to over 13,000.
Names include Myer and Ikea— Australia’s largest department store group and home furnishing retailer respectively. Strandbags’ 300 Aussie stores will also be equipped with humm services.
And across the Strait, JB Hi-Fi New Zealand has also joined the humm movement, providing the buy-now-pay-later method to their 14 stores across the North and South islands.
Flexigroup has even pushed humm into the health sector, getting National Hearing Care, National Dental Plan and City Fertility on board.
Flexigroup’s new CEO Rebecca James noted in the update the company’s ‘strong reputation for innovating to meet changing consumer demand…and it’s clear that there is strong demand for our differentiated proposition.’
‘The range of merchants added reflects this appetite for more flexible Buy Now Pay Later solutions that can service a wider breadth of transactions and offer greater repayment terms to the retailers’ customers.’
What sets humm apart
Flexigroup has been in the buy now, pay later sector for 20 years, with their previous brands Certegy EziPay and OxiPay steering the ship before humm was revealed in February.
The defining attribute of humm is that it can be used for purchases from $1 to $30,000. This is impressive when compared to their core rival Afterpay, which has an average transaction amount of $150. On top of that, humm give their customers spending less than $2000 a pay-back window of 10 weeks, trumping Afterpay’s eight weeks.
But with this new merchant increase, Ms James believes humm won’t need to rely on their key difference for future success.
For instance, the Myer deal ‘means that a customer can buy a $250 dress on level two…as well as $3000 bed on level six, and they are able to do that all on the same platform.’
What’s more, the list of new merchants means humm is now connected to Australia’s 20 largest point-of-sale providers, meaning ‘the ability to add new sellers quickly to the seller platforms is now there. We will be both growing from a seller perspective and from a customer perspective,’ says James.
FlexiGroup certainly seems like a company worth watching. Considering Afterpay appears more interested in their US market for the moment, humm may surpass its buy now, pay later competitors here in Australia.
Ryan Clarkson Ledward
For Money Morning
PS: Speaking of alternative ways of paying, the Bitcoin boom is far from being a distant memory. Check out this free report on the ‘100-Year Tech Boom’ to find out the five things you should know about the $120 billion crypto market. Download now.