The Afterpay Touch Group Ltd (ASX: APT) share price has been a strong performer on the local market today.
In afternoon trade the fintech company’s shares are up 4.5% to $16.71.
Why are Afterpay Touch’s shares storming higher?
While I suspect that some of today’s gain is down to investors seizing on recent share price weakness to pick up shares, news that it has now launched its Afterpay service into the dental market could also have given it a boost.
Last month when the company released its full year results it revealed several significant growth opportunities in the Australian and New Zealand markets that it had its eyes on.
These new verticals included beauty, entertainment, travel, and health.
In respect to entertainment, an agreement with Ardent Leisure Group (ASX: AAD) operated Dreamworld was an example of how the company expected to grow its presence in that market. And a deal with Qantas Airways Limited (ASX: QAN) subsidiary Jetstar was the start of its plans to grow its presence in the travel market.
The health market was still a largely untapped market for the company, though, until now.
According to the AFR, recently listed dental company Smiles Inclusive Ltd (ASX: SIL) has agreed a deal with Afterpay Touch to roll-out its buy now, pay later platform across its 52 dental practices.
Smiles Inclusive’s CEO, Mike Timoney, told the media outlet that this is the first widespread roll-out in the health services sector.
Mr Timoney believes that the company, which operates the Totally Smiles brands, will benefit greatly from the Afterpay service and expects demand from millennial customers to grow strongly.
I agree with this view and feel that making payments more manageable will appeal to consumers and could entice the “65 per cent of Australians that don’t go to the dentist regularly” into returning to the dentist chair.
Though it is worth noting that while it may be Afterpay’s first widespread roll-out, rivals 1300 Smiles Limited (ASX: ONT) and Pacific Smiles Group Ltd (ASX: PSQ) have been offering similar payment services via Zip Co Ltd (ASX: Z1P) for a little while.
So it may be worth holding back and waiting to see what impact it does have on the Smiles Inclusive business before jumping in feet first on the news.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended 1300SMILES Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.