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Why you should invest in Afterpay and these BNPL players

Share prices for these ‘buy-now, pay-later’ (BPNL) fintech players have zoomed ahead this month, despite investor uncertainties creating ripples through the ASX. Here’s a BNPL update on the key players in the sector – all fighting for a piece of this $22 trillion total addressable market.  

Afterpay Touch Group Ltd (ASX: APT)

Afterpay is up just 2% higher over the last month on top of a 44% increase since late August, closing at $34.65 yesterday, although the Afterpay share price has dropped 1.93% in morning trade to leave last month’s performance relatively flat.

Although September was flat, since announcing FY results in August, Afterpay’s share price has zoomed ahead. Its UK business, Clearpay, has acquired 200,000 customers in its first 15 weeks. Of particular note, Afterpay lowered its late income fee as a percentage of sales by 5.7% to 18.7%, compared to the last FY.

Zip Co Ltd (ASX: Z1P)

Zip’s share price is rallying ahead, having grown a whopping 31% since last month to be trading for $5.20 at time of writing.

This is a record high for the company, driven by its fantastic FY performance as well as positive sentiments for its future. Zip grew its customer base by 80% to 1.3 million, sharing further plans to expand globally. Management expects that the company will hit its targets, meaning Zip will see its active user base double in 2020.  

Splitit Payments Ltd (ASX: SPT)

Splitit’s share price has risen 11% higher over the month and is currently trading for $0.62.

Despite a modest earnings result, Splitit has seen its market capitalisation grow steadily over the last few months. Last month, it announced the launch of a B2B product that allows suppliers and manufacturers to offer buyers its interest-free, credit solution.         

This is a lucrative move, one that we’ll certainly be keeping tabs on.

FlexiGroup Limited (ASX: FXL)

FlexiGroup closed at $2.32 yesterday, 21% higher than last month, and has since dipped slightly in morning trade to $2.30.

Its BNPL product, humm, has been producing extraordinary results. Total transactions were up 25% year-on-year, supported by its new clients throughout the year across retail, health and home improvement.

All these new, high-profile clients bring the retailers on FlexiGroup’s platform to 18,000, explaining how its volume growth for the last 2 months is 85% higher than the prior corresponding period.

Sezzle Inc (ASX: SZL)

Sezzle is on the rise. Its share price is sitting at $2.40, which is 9% higher over September.

Since its outstanding HY report, the company also announced its new partnership with Visa’s CyberSource platform. This means CyberSource merchants will be able to offer Sezzle’s interest-free BNPL product worldwide.

With a fast-growing user base and listed merchants, this will also be another one to watch for October.

5 stocks under $5

We hear it over and over from investors, "I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" And it's true.

And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!

*Extreme Opportunities returns as of June 5th 2020

Audrey Thehamihardja has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO and ZIPCOLTD FPO. The Motley Fool Australia has recommended FlexiGroup Limited and Sezzle Inc. 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.

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