One of the fastest growing areas of the financial sector at the moment is the buy now pay later market.
Luckily for investors there are a number of companies with exposure to this market trading on the ASX right now. Which should you buy?
Afterpay Touch Group Ltd (ASX: APT)
The Afterpay Touch share price has rocketed a massive 320% over the last 12 months. The payments company's shares have taken off thanks to the success of its buy now, pay later platform in the massive U.S. market. Strong uptake in the United States by both consumers and merchants led to the company posting a whopping 147% increase in underlying sales to $2.3 billion during the first half of FY 2019. I expect more of the same in the second half and beyond, potentially making Afterpay Touch a great buy and hold option.
Splitit Ltd (ASX: SPT)
Since hitting the ASX boards at the end of January the Splitit share price has risen almost 450%. Investors appear to have been fighting to get hold of the company's shares on the belief that it could be the next success story in the industry. Splitit is a provider of cross-border credit card-based instalment solutions to businesses and merchants. Its service allows consumers to pay for a product using their existing credit cards but divide the total cost across as many as 36 interest-free monthly payments. However, it is early days and generated just US$800,000 of revenue in FY 2018. I would suggest investors hold back and wait to see how the company fares over the next 12 months before considering an investment.
Zip Co Ltd (ASX: Z1P)
The Zip Co share price has zoomed just under 185% higher since this time last year. The buy now, pay later provider has caught the eye of investors due to its impressive growth. In the first half of FY 2019 Zip reported record transaction volume of $495.2 million, leading to a whopping 114% increase in revenue to $34.2 million. I think Zip Co is well-positioned to continue this strong growth, which could make it a great buy and hold option along with Afterpay.
