Flexigroup Share Price Up 13.4%…Can They Beat Afterpay?

Digital payments provider Flexigroup Ltd [ASX:FXL] has traded well on the ASX today, with their shares up 13.4% at time of writing.

The company has been in a downtrend this month, with their shares falling 21% in price from 1 August to yesterday, 26 August.

The last time Flexigroup shares were that low was back in the first week of May.

But by the end of May, Flexigroup had managed to push their share price up to an even $2.00 following the launch of their newest ‘buy now, pay later’ (BNPL) platform, Humm.

Flexigroup sought to rival Afterpay Touch Group Ltd [ASX:APT] with a BNPL service that had a larger purchase price range and a greater payback window than the fintech leader.

And it seems history is about to repeat, with Flexigroup announcing yet another BNPL innovation aimed at shaking up the growing fintech market.

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Flexigroup has entered a fast-tracked deal with Mastercard to launch Bundll — a BNPL platform that allows its users to, well, ‘bundle’ weekly purchases and pay for them over an extended period.

Bundll is set to launch sometime between October and December, and will be available anywhere that Mastercard is accepted.

This is one detail that sets Bundll apart from Afterpay, where retailers have to specifically offer the service.

But its key mode of difference is the ‘bundling’ aspect, making Bundll a solution for smaller everyday expenses, rather than one-off purchases.

Flexigroup CEO Rebecca James says the service is ‘really addressing the shift out of credit cards and the millennial dislike of interest. It’s about transforming the debit card’.

Is it enough to knock Afterpay off the top spot?

While it’s good to see Flexigroup find their point of difference in the fintech competition, it’s quite a hard feat to contend with the sector’s first mover, Afterpay.

Afterpay have the brand recognition behind them, as well as established international expansion.

Year to date, their share price is up over 100% and investors seem to be remaining confident in further growth potential.

Today, Afterpay shares are up over 7%, pre-empting the release of their FY19 results tomorrow. This suggests investors are confident of a positive performance update.

And even if Afterpay is in fact nearing the end of their climb, there are still all the other fintech competitors that Flexigroup must contend with.

Zip Co Ltd [ASX:Z1P] is the largest Australian-based rival, with over 1.3 million customers and a $1.13 billion market cap. And their share price has risen by over 190% since January.

Then there’s the $5.5 billion European fintech leader, Klarna, who has partnered with CBA to further their reach into Australia and New Zealand.

So Flexigroup, with a market cap of around $560 million, has a fair way to travel to reach the top.

Then again, tomorrow’s news regarding Afterpay’s performance could send another shockwave through the fintech sector.

It’s definitely worth keeping an eye on.


Ryan Clarkson-Ledward,
For Money Morning

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Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

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