The Openpay Group Ltd (ASX: OPY) share price plunged this afternoon. At close of trade, Openpay shares are sitting at $2.49 apiece, down 4.96%.
What was weighing on the Openpay share price today?
In addition to the broader tech share sell-off, the Australian Financial Review recently reported that the buy now, pay later (BNPL) providers have drawn up new standards to regulate the industry. Under the new regulations, credit checks will be more stringent.
This action follows a 2019 senate query into BNPL with the intention to protect customers. With big players like Afterpay Ltd (ASX: APT) involved in the mix, it's no wonder that the Australian Securities and Investments Commission (ASIC) and Reserve Bank are throwing in 2 cents about the new rules.
ASIC believes that too many customers are being charged late fees. The Reserve Bank thinks that the fee merchants charge is too high.
The uncertainty over how these new standards will impact BNPL players could also be contributing to the negative sentiment.
What else is Openpay up to?
According to its first half FY21 update, Openpay has commenced a launch in the US. The Openpay US leg 'Opy' is taking shape in San Diego, California. The company is also planning to expand into the healthcare and automative industries in the UK.
The company also has major new merchants on board, with Ford Australia agreeing to offer Openpay payment options in addition to Kogan.com Ltd (ASX: KGN).
Openpay also made note of the new regulatory environment in its latest earnings report. The company states that "Openpay is a code compliant member of the Australian Finance Industry Association (AFIA). It is expected that the AFIA Buy Now Pay Later Code of Practice will commence in March 2021."
Considering that the code of practice is so new, it's difficult for the market to form an opinion on the impact it will have on business.
Openpay share price snapshot
The Openpay share price has fallen 24% over the past three weeks.
At the current price, the Openpay market capitalisation is $275.4 million. There are 108 million shares outstanding.
