Got Sezzle (ASX:SZL) shares? What’s in store for FY22?

Here’s what the US-based BNPL has planned for the new financial year.

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The Sezzle Inc (ASX: SZL) share price managed to topple its large cap buy now, pay later (BNPL) peers in terms of FY21 gains.

Shares in the US-based BNPL company delivered a 134% return in FY21, compared to the Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) share prices which increased 92% and 43% respectively.

With FY21 said and done, let’s take a look at what Sezzle is up to in FY22.

What Sezzle has planned for FY22

Launch of Sezzle Up

Sezzle Up was launched in 4Q20 as an “upgraded” version of the existing Sezzle experience.

For customers, the benefit of upgrading to Sezzle Up is that it enables the company to report their payment histories to credit bureaus. By making payments on time, customers can improve their credit scores and increase their spending limits to give them more buying power.

For Sezzle, the primary payment processing method is an automated clearing house (ACH).

In the company’s first quarter results, it observed a positive shift in payments towards ACH. In 1Q20, less than 3% of payment dollar volume was processed with ACH. By 1Q21, ACH was processing more than 15% of dollar volume.

Sezzle said ACH payment processing fees are approximately 150 basis points lower than traditional forms of payment.

Pleasingly, the first quarter results helped rally the Sezzle share price 7% higher to $9.63.

International expansion

International markets are certainly the name of the game for ASX-listed BNPL companies.

While Afterpay and Zip might steal the spotlight for international expansion, Sezzle has also been busy testing the waters of global opportunity.

In July 2020, Sezzle launched a pilot test for product-market fit in India. According to its FY20 annual report, the company said “while it is still in the very early stages, we are optimistic about the opportunity to be a first-mover in such a high growth market”.

In December 2020, the company began product discovery tests in Europe, saying “we are cost-effectively building the infrastructure for future expansion”.

More recently, in its first quarter results, the company announced its entry into Brazil with a similar “playbook to India and Europe — limited investment, low risk and minimal resource requirements”.

While product launch timing is uncertain, Sezzle said Brazil represents “a long-term opportunity considering it is one of the ten largest countries in the world, measured by GDP and population”.

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Motley Fool contributor 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 and has recommended AFTERPAY T FPO and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Sezzle Inc. The Motley Fool Australia owns shares of and has recommended 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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