Why the IOUpay (ASX:IOU) share price is up 15% this week

The IOUpay Ltd (ASX: IOU) share price has soared 15% this week. Let’s take a look at what’s been happening for the BYNPL provider.

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asx share price movement represented by blue graphic containing words buy now pay later

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Late buying activity pushed the IOUpay Ltd (ASX: IOU) share price 18.67% higher to 44.5 cents on Wednesday. The renewed buying interest will come as a welcome relief to shareholders, with IOUpay shares having fallen by around 23% since 2 March. 

What’s driving the IOUpay share price? 

Continued momentum in BNPL service

Last Tuesday, IOUpay announced it had signed a strategic teaming agreement with Malaysia’s MYP1 to integrate with its Smart POS system. 

This agreement will see MYP1 refer its merchants to IOUpay’s services, including buy now, pay later (BNPL). The company has described this opportunity as one which will fast track its market penetration across large numbers of merchants into its BNPL payment services. 

Life coming back into the broader BNPL sector 

IOUpay isn’t the only ASX-listed BNPL provider notching up some gains lately.  

BNPL leaders such as Afterpay Ltd (ASX: APT), Zip Co Ltd (ASX: Z1P) and Sezzle Inc (ASX: SZL) have all risen by more than 20% in April, indicating a return of investor appetite into the sector. 

Even the broader S&P/ASX 200 Info Tech Index (ASX: XIJ) has surged 12% so far this month, putting fears over rising bond yield somewhat behind us. 

BNPL leaders eyeing Asian expansion 

In a ‘Digital Payments in SEA‘ presentation on 16 March, IOUpay described the South East Asia opportunity as follows: 

The ‘Sweet Spot’ for BNPL is larger in SEA due to the lack of consumer credit and underbanked populations overlaid with mobile penetration levels and the ever increasing growth in e-payments which facilitate BNPL offerings and adoption rates.

It could be for these reasons that Afterpay and, more recently, Zip have been targeting an expansion into the South East Asian region. 

Afterpay announced an early-stage investment into Asia back in late 2020, with an established base in Singapore to drive early development. It could also potentially leverage ties with its substantial shareholder, Tencent Holdings for opportunities. 

Similarly, Zip’s quarterly update highlighted the strategic acquisition of leading Philippines BNPL player, TendoPay. 

While the billion-dollar-plus market capitalisation BNPL companies have started to take interest in the SEA region, IOUpay is also gaining a foothold in the market and has a market cap of just $245 million. 

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Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Sezzle Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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