Humm (ASX:HUM) share price dips despite deal with Westpac NZ

The BNPL provider’s shares aren’t humming today.

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The Humm Group Ltd (ASX: HUM) share price is having a subdued day as it announces a partnership with Westpac Banking Corp’s (ASX: WBC) New Zealand division.

At the time of writing, shares in the buy now, pay later (BNPL) provider are trading for 99.5 cents – down 1.49%. The S&P/ASX 200 Index (ASX: XJO), meanwhile, is 0.39% higher.

Let’s take a closer look at today’s news.

The Humm share price is falling

In a statement to the ASX, Humm Group declared it has “entered into a joint venture agreement with Red Bird Ventures Limited” – a subsidiary of Westpac NZ – to launch its BNPL product, bundll, to the New Zealand market.

Bundll is a tap and go service on a customer’s phone. Using the Mastercard Inc (NYSE: MA) network, it allows the user to use BNPL anywhere and for any amount. Bundll will be available to all New Zealanders, but Westpac NZ customers will receive “preferential” benefits.

Red Bird has the option to buy equity in bundll New Zealand as part of the deal.

Investors are not rating today’s news, judging by the drop in the Humm share price.

Management commentary

Humm Group CEO, Rebecca James, said

We are delighted to be partnering with Westpac NZ to bring bundll to New Zealanders. BNPL is one of the fastest growing segments of the financial industry, and with this new arrangement Westpac NZ will reap the benefits of having an innovative and customer driven BNPL offering without having to build the product themselves.

This is our first deal under our strategic agreement with Mastercard and we are actively in discussions with a number of banks, loyalty programs and financial institutions about similar potential partnerships around the globe.

Division President of Mastercard Australasia Richard Wormald added:

With bundll, Humm group have developed a unique solution that easily allows banks, loyalty programs or larger retailers to offer a solution to their customers, without needing to undertake any IT development. We are excited about the potential this has globally.

Humm share price snapshot

Over the past 12 months, the Humm share price has declined 15.4%. In contrast, BNPL competitors Afterpay Ltd (ASX: APT) and Sezzle Inc (ASX: SZL) are 61% and 8% higher.

Humm Group has a market capitalisation of approximately $485 million.

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Returns as of 15th February 2021

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Mastercard. The Motley Fool Australia has recommended Humm Group Limited and Mastercard. 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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