The IOUPay Ltd (ASX: IOU) share price has been on form on Wednesday.
In afternoon trade, the Malaysia-based buy now pay later (BNPL) provider’s shares are up 9% to 41 cents.
Why is the IOUPay share price surging higher?
The IOUPay share price was given a boost today by the release of a positive announcement.
According to the release, the company has entered into a Bill Payment Service Agreement with RMS Reloads.
RMS Reloads has been established for over 10 years as one of South East Asia’s largest offline-to-online payment networks.
The company was initially established in Malaysia in 2010 as MOL Accessportal, but was renamed RMS Reloads after being acquired in April 2018 by Razer Inc.
What is the agreement?
The agreement is for three years and will see RMS Reloads provide (on a non-exclusive basis) a collection agency service.
This service will enable IOUpay customers to make BNPL instalment payments at any merchant across RMS Reloads’ extensive national merchant network of more than 10,000 physical points-of-presence in Malaysia stores.
Under the terms and conditions of the agreement, the collection agency service is provided by RMS Reloads to IOUpay in exchange for a standard low fixed percentage fee of the payment amount on a per transaction basis. The percentage has not been disclosed due to standard commercial-in-confidence reasons.
Management notes that the agreement adds material strategic value to the company’s payment collection operations, in-field distribution presence, and merchant and customer reach. This is due to RMS Reloads’ wide-reaching physical points-of-presence, which includes 2,500 7- Eleven stores, 1,900 99 Speedmart stores, and 518 KK MART stores.
Though, given that these are convenience stores, they’re not exactly the type of locations that BNPL customers typically use these services.
Nevertheless, management is very positive on the deal. And so is the market, judging by the IOUpay share price performance.
IOUpay’s CEO, Mr Khong Kok Loong, commented: “We are delighted to be working together with RMS Reloads and the Razer Pay Group. Providing our customers with 10,000 of Malaysia’s most popular store locations with over-the-counter services to make their BNPL payments is an important step in making our BNPL service offering even more accessible and convenient for our customers.”
“The RMS Reloads merchant network represents an infield distribution channel with some of Malaysia and SEA’s biggest shopping brands. The Razer Fintech Group is a natural fit with IOUpay which we look forward to building further,” he concluded.
Following today’s gain, the IOUPay share price is now up over 100% year to date.