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Why the Openpay (ASX:OPY) share price is up and down today

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The Openpay Group Ltd (ASX: OPY) share price is on the move today after the company released a positive trading update for October and November.

Shares in the buy-now-pay-later (BNPL) company started the day in negative territory before surging up 4% higher to $2.84. That trend has since flattened, with the Openpay share price now trading up 0.73% at $2.75 at the time of writing.

Let’s take a look at the company results.

Trading update

For the period ending October 31, Openpay reported continued strong growth across its leading indicators in Australia.

  • Active plans increased to 1,149, representing a 233% uplift of the corresponding period (pcp).

  • Active customers totalled 390,000, a 143% jump during the same time last year.

  • Active merchants grew to 2,346, up 34% on October FY20.

  • Total transaction value (TTV) rose to $25.8 million, reflecting a 101% improvement on the pcp.

The robust results were achieved by customer demand and merchant acquisition in key markets.

During November to date, Openpay reported its strongest TTV on record due to Australian online sales initiatives. The BNPL company expects the upcoming sales season leading into Black Friday, Cyber Monday, and Christmas will bode well for the company.

Major partnerships

Openpay also noted that it signed on significant merchants to its platform. These include major online retailer Kogan.com Ltd (ASX: KGN) and NASDAQ listed, BigCommerce Holdings Inc. (NASDAQ: BIGC).

The latter agreement will see Openpay’s BNPL solution integrate into BigCommerce’s eCommerce marketplace in Australia and the United Kingdom. BigCommerce has more than 5,000 existing trading merchants across both countries.

What did the CEO say?

Speaking on the positive results, Openpay CEO Michael Eidel said:

Openpay has continued its robust business performance over the past two months following our record performance in the September quarter. We’re continually delivering on our strategy of building a high-growth merchant portfolio based on strategic partnerships.

Alongside this continued growth in our core key markets of Australia and the UK, we’re also pleased to have been included in the High Growth Export Services program by Federal Government trade and investment agency, Austrade. This initiative will greatly assist with our global vision and our aim of expanding into new markets to complement our current strong growth in our existing markets.

Updated ASIC report on BNPL sector

In November 2018, the Australian Securities and Investments Commission (ASIC) released a report on the BNPL sector. Titled, Report 600: Review of Buy Now Pay Later Arrangements, the report looked into developing a code of practice for BNPL providers.

ASIC will release Report 672, an updated version of the report, in the coming months. The review will seek to develop a set of obligations to accommodate the code member’s different business models.

Openpay addressed ASIC concerns about missed payments fees, saying it was continuing to evolve its product and customer experience. The company noted that customers were able to change repayment dates without incurring fees. Furthermore, there was a cap on late payment fees for those customers who delayed payments.

Mr Eidel commented on the ASIC inquiry, saying:

Openpay is highly sensitive to the need to provide products to consumers in a safe and responsible manner. This is why we make our product information about our fees, and the fact that we never charge interest, as transparent as possible and also why we have a proactive hardship policy if customers are experiencing any particular difficulty with their repayments.

We are grateful for ASIC’s ongoing review of the sector and welcome the implementation of the BNPL Code of Practice, which is expected to come into effect in early 2021.

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Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd. The Motley Fool Australia has recommended Kogan.com ltd. 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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Aaron Teboneras