Openpay Shares Down as UK Reviews of ‘Buy Now, Pay Later’ Sector

In Australia, ‘buy now, pay later’ (BNPL) has become a way of life for many. A payment method that continues to grow in popularity.

And it has endured many teething problems, including plenty of calls to restrict or enforce it more sternly. But despite these efforts, BNPL still retains a lot of the financial freedom it started with. Making it far easier to manage than typical lending operations, for example.

Now though, the focus is turning to the UK. Where, just like in Australia, regulators are set to take a closer look at how the industry works.

And for the BNPL players in this market, it could present a range of new rules or restrictions. Outcomes which could dampen the outlook for BNPL stocks.

But, at least one local fintech company — Openpay Group Ltd [ASX:OPY] — is welcoming this review.

A stance that has helped keep the OPY share price steady today, compared to broader falls from other notable BNPL players.

Here is what they had to say…

With open arms

According to Openpay, they have actively been working with regulators recently. Aiming to ensure that they, as well as others, are able to provide better choice, innovation, and protection to their customers.

In this regard, they have welcomed the review with open arms. Clearly looking to work with the regulators to create a healthy and prosperous BNPL sector. Noting their previous efforts with regulators in Australia and NZ as pivotal to their current success.

Clearly, Openpay is trying to be as transparent as possible.

Cultivating a business that values flexibility in order to meet certain expectations. Not just for customers might I add, but also merchants.

Here’s what CEO Michael Eidel had to say:

Consumers and merchants are at the heart of what we do, and Openpay is committed to            ensuring a fair and transparent playing field for all. We embrace appropriate regulatory                   oversight in all markets and look forward to further engaging with legislators and the FCA to       ensure that the regulation protects consumers and fosters innovation and consumer choice.

Openpay is pleased to see recognition that BNPL can be a helpful way for consumers to              manage their finances.

What’s next for Openpay & the BNPL sector?

Obviously, all this talk is positive, but it doesn’t necessarily mean Openpay will get the outcome it seeks.

We’re seeing a lot of the big names in the BNPL sector today trading lower in anticipation of this review. With investors clearly concerned about the possibility of new rules and restrictions.

So, while Openpay is putting a positive spin on things, it may not pan out that way.

Only time will tell what the UK officials decide to do.

But, at the very least, Openpay are clearly looking to work with them. A move that does put them in good spot for future endeavours. No matter what the outcome of this review may be.

For that reason, shareholders have reason to be at least a little optimistic. Or at least, not totally negative — as can be seen by the neutral position in trading today.

If BNPL has you on edge though, don’t worry. There are plenty of other fintech players out there on the market. Companies that operate inside the same broader sector, but not strictly within the BNPL bubble, as it were.

In fact, we’ve put together a report on our three favourite fintech stocks to look at right now. Each of which have some extremely exciting growth potential.

To find out more, as well as learn the names and tickers of these three stocks, click here.


Ryan Clarkson-Ledward
For Money Morning

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.

Ryan is also the Editor of Australian Small-Cap Investigator, a stock tipping newsletter that hunts down promising small-cap stocks by dissecting the latest events affecting the world.

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