Within the update, the company announced its fifth consecutive quarter of growth, as well as an improvement to its credit quality. As a result, the market is sending the company's stock higher.

At the time of writing, the Payright share price is 39 cents, 13.62% higher than its previous close. It was as high as 45 cents — up 30% — in early trade before partially retreating.

Let's take a closer look at the first quarter of FY22 for the merchant-focused buy now, pay later (BNPL) provider.

The quarter just been for Payright

The Payright share price is surging higher after the company reported its gross merchandise value for the September quarter was 72% more than that of the prior comparable period (pcp). Payright's gross merchandise value reached $27.6 million for the 3 months just been.

Payright also saw its income from fees boom in the 3 months ended 30 September, coming to $3.8 million. That represents a 14% increase on that of the previous quarter and 45% more than the pcp.

Such strong performance came despite ongoing lockdowns in Australia and New Zealand.

The company also onboarded 5,800 new customers over the September quarter, bringing its total number of customers to 59,300. That's 58% more customers than it had at the end of financial year 2021's first quarter.

Finally, Payright's overall credit quality improved notably over the 3-month period. As of 30 September, the company had arrears of just 3.18%, down 18 basis points on that of the prior quarter.

Commentary from management

Co-CEO Piers Redward commented on the results boosting the Payright share price today, saying:

Our robust internal underwriting measures and collections practices have helped us navigate the balance between maintaining and protecting the quality of the loan book and accommodating COVID impacted customer hardship.

Fellow co-CEO Myles Redward added:

We are consistently attracting new customers in key target verticals with higher transaction values and the recent launch of our app has further increased usability and accessibility of our product, contributing to the 58% increase in total customer numbers…

With many states and territories now emerging from lockdown, we expect to see an uptick across our key metrics leading into November, December, and January.

Payright share price snapshot

Despite today's gain, the Payright share price is still deep in the red on the ASX.

It has fallen 59% since the start of 2021. It is also 61% lower than it was this time last year.

The post Payright (ASX:PYR) share price surges 13% on trading update appeared first on The Motley Fool Australia.

Afterpay shares were quick to sell off after news emerged that Apple was looking to develop its own buy now, pay later (BNPL) product.

On the same day, PayPal announced that it will not charge late payment fees for its BNPL services.

From mounting competition and increasing product differentiation, how did the Afterpay share price respond to such concerns in the past?

ASX-listed newcomers

Afterpay and Zip Co Ltd (ASX: Z1P) were the first movers when it comes to going public, listing in May 2016 and September 2015 respectively.

Fast forward to 2019, there seemed to be no shortage of new players seeking to raise capital to try and grab a piece of the BNPL market.

In January 2019, Splitit Ltd (ASX: SPT) made its ASX debut at a listing price of 20 cents.

The now third-largest ASX-listed BNPL player, Sezzle Inc (ASX: SZL) would list on July 2019 at an offer price of $1.22.

Before year end, Openpay Group Ltd (ASX: OPY) would also join the ASX at a listing price of $1.60.

2020 saw players including Laybuy Holdings Ltd (ASX: LBY) and Payright Ltd (ASX: PYR) complete successful listings.

Rather than focusing on how the Afterpay share price performed during this period, it might be worth noting that earlier initial public offerings (IPO) such as Splitit and Sezzle have been able to trade well above listing prices, up 165% and 595% respectively.

However, later comers Laybuy and Payright have all struggled to deliver shareholder value, plummeting 66% and 56% below listing prices.

Big banks want a slice of the pie

Australia's largest banks haven't wasted time to join in on the emerging BNPL space, either establishing partnerships with BNPL providers or launching their own products.

In September last year, Commonwealth Bank of Australia (ASX: CBA) and National Australia Bank Ltd. (ASX: NAB) both launched new, interest-free credit cards in an attempt to disrupt the BNPL market.

Between 31 August and 9 September 2020, the Afterpay share price tumbled 20%, from $88 to lows of $70.

But by mid-October 2020, Afterpay shares had rallied back up to breakeven.

According to the Australian Financial Review, "Interest-free credit cards are nothing new and unlikely to be felt by Afterpay in the Australian market given its dominance".

More recently, CBA is upping the ante, revealing an in-house BNPL offering called "StepPay".

This news broke out in late May, right before a 40% surge from $92 to $130.50 between 1 and 24 June.

What's next for the Afterpay share price?

This time around, it's US$2.48 trillion giant Apple, which is eyeing a potential entry into the BNPL sector.

Commenting on the situation, Shaw and Partners portfolio manager, James Gerrish said that:

Arguably the biggest issue over the coming months for this volatile sector is sentiment, it's definitely unlikely to be good following this news and a further 20-25% fall by local leader Afterpay (APT) for example wouldn't be a surprise, especially considering it's well within the usual swings of both the sector and stocks.

The post How has the Afterpay (ASX:APT) share price responded to competition in the past? appeared first on The Motley Fool Australia.

Shares in the Australian-based buy-now, pay-later (BNPL) provider have since retreated slightly, trading at 56.5 cents at the time of writing, up 4.63%.

Let's take a closer look at what Payright released to the ASX market today.

Payright extends merchant offering

The Payright share price is pushing higher after the company delivered a positive update to investors.

In today's statement, Payright advised it has teamed up with Australian fintech, Mint Payments.

Founded in 2006, Mint Payments processes mobile payments and transactions across Australia, New Zealand and Singapore. The group provides an online platform that enables businesses to accept credit and debit card payments on smart devices. Its merchant base includes well-known brands such as Nutrimetics, Tupperware, Fuji Film, Nestle, Helloworld and Jim's Financial Services.

The collaboration between the pair will see Payright integrate its BNPL solution into Mint's online payments processing system. This provides more than 7,000 merchants from Mint Payments with access to Payright's BNPL offering for e-commerce and instore transactions.

In effect, the partnership represents a significant opportunity in which Mint Payment merchants can use Payright's solution. The BNPL company noted that extending its footprint through its merchant base, will drive further value for shareholders.

Management commentary

Payright co-CEO Piers Redward welcomed the partnership, saying:

Our partnership with Mint Payments will play an important role in the evolution of our payment ecosystem.

Mint Payments services a reputable and extensive network of more than 7,000 merchants across travel and accommodation, online retail and hospitality, trade and professional services, making it a strategic fit for our BNPL product tailored to higher-value purchases.

Mint Payments co-founder and group CEO Alex Teoh added:

BNPL continues to rise in popularity as a payment method and Payright's seamless user experience and focus on bigger ticket items made it an attractive partner for our business. Together with Payright, we look forward to continuing to make e-commerce less complicated for Australian consumers.

About the Payright share price

Over the past 12 months, the Payright share price has fallen more than 40%, and is down around the same amount year-to-date. The company's share price hit an all-time low of 41.5 cents in late May.

Payright has a market capitalisation of roughly $39 million, and approximately 68 million shares on its books.

The post Payright (ASX:PYR) share price jumps 6% on partnership announcement appeared first on The Motley Fool Australia.

Payright is an emerging buy now, pay later (BNPL) company specialising in "more considered" purchases valued between $1,000 and $20,000.

What did Payright announce?

The Payright share price has opened stronger this morning after the company revealed that it had exceeded FY21 forecasts across all key metrics with a record fourth quarter.

In the quarter ending 30 June 2021, the company reported a record quarterly gross merchandise value (GMV) of $26.1 million, up 134% against the prior corresponding period (pcp). June saw a record monthly GMV of $9.2 million.

Payright also achieved a record ~6,000 new customers joining the platform in the June quarter, bringing total customer numbers to ~53,400 as at 30 June, up 58% on pcp.

Merchant stores had also increased in line with the company's guidance, hitting 3,400 by the end of FY21. This represents a 41% increase compared to a year ago.

What did management say?

Payright Co-CEO Piers Redward welcomed the record-setting update, saying:

In what has been a record quarter for the business, we are pleased to have surpassed guidance in all key metrics, reiterating our ability to deliver on our growth strategy.

We are experiencing an increased interest and awareness of Payright's business offering as a result of our ongoing national marketing campaign, which is helping the company build its presence in Australia and New Zealand.

Payright Co-CEO Myles Redward said the company had delivered on platform upgrades to merchant dashboard, customer application and checkout processes in the quarter. He said Payright expected to roll out "a healthy pipeline of new innovations, including our 'Tap & go' card technology" in the coming months.

The continued growth in customer and merchant numbers provides us further validation of the need and demand for Payright's targeted offering, and we remain very optimistic about Payright's growth outlook.

A long way to go for the Payright share price

Despite today's advance, the Payright share price has tumbled 45% from $1.00 to 54.5 cents since its ASX debut on 23 December 2020.

The journey has been more painful for investors that participated in the Payright initial public offering (IPO), where the listing price was $1.20.

The post Why the Payright (ASX:PYR) share price has surged 10% today appeared first on The Motley Fool Australia.

Payright is an emerging player in the buy now, pay later (BNPL) space, providing in-store credit, point of sale and online deferred payment options. The company specialises in transactions between $1,000 and $20,000.

What did Payright announce?

In today's statement, Payright announced it had achieved gross merchandise value (GMV) of $16.9 million for April and May, a 135% increase compared to the prior corresponding period.

In addition to its fourth quarter GMV update, the company also provided FY21 forecasts across key performance metrics.

The company forecasted a 55% increase in total customers to 52,500 by 30 June 2021, a 45% increase in gross receivables to ~68.2 million, and a 42% increase in merchant stores to 3,400.

The market appears to be pleased with Payright's results and guidance, with sending Payright shares up by more than 5%.

Management commentary

Payright Co-CEO Piers Redward commented on the company's fourth quarter results:

The growth in customer numbers is particularly pleasing, and reflects the success of the national, multi-channel brand building campaign we have undertaken across five state capitals in Australia. We have expanded the functionality of our platform to facilitate rapid customer onboarding and frictionless checkout. We have also introduced the first of our direct-to-customer features, Bill Smoothing, which allows consumers to spread the cost of their utilities bills, council rates, vehicle registration, and car and home insurance premiums, up to $1,000 over a three-month term.

With our innovative user experience technology now implemented, a growing number of merchants and customers on the Payright platform, and an increasing receivables book, we are very well placed to continue our strong revenue growth into FY22 and beyond.

A challenging period for the Payright share price

The Payright share price listed on the ASX on 23 December last year, closing at $1.00 despite a listing price of $1.20.

Its shares briefly rallied to a high of $1.22 on 16 February 2021, coinciding with the broader BNPL rally that took place in February.

As the BNPL sector began to sell-off between late February to May, the Payright share price tumbled from the $1.00 level to as low as 41.5 cents on 31 May.

The post Payright (ASX:PYR) share price jumps 5% on positive quarterly update appeared first on The Motley Fool Australia.

The Payright share price reached an intraday high of 75 cents, up 15% from Friday's close, but it has since partially retreated.

At the time of writing, Payright shares are trading at 73 cents, up 12.31% from Friday's close.

Let's look closer at the company's prosperous 2021.

Record breaking performance from Payright

The quarter ending March 2021 was Payright's best yet, the company announced this morning. Further, it announced that March 2021 saw the company deliver its best monthly performance ever.

Over the quarter, Payright's gross merchandise value (GMV) rose 38%, bringing in more than $22 million.

The number of customers using the BNPL service increased by 52% to around 47,500. Meanwhile, the number of merchants offering the service rose by 43% to more than 3,100.

The company stated that these merchants now include home improvement retailers Australian Outdoor Living, Stratco and Into Blinds.

Payright's underlying losses related to credit defaults were similar to those of previous quarters at around 1.64%.

The quarter's results follow on from positive half-year results. In the six months ending 31 December, Payright posted a 38% revenue increase, reaching $5.8 million. 

Is Bill Smoothing driving the Payright share price?

The Payright share price boomed when it announced the launch of its Bill Smoothing payment option late last month, and the company believes it will underpin further growth.

Bill Smoothing is a direct to customer service. It allows customers to spread the cost of household bills, including utilities, car and home insurance premiums, council rates, and vehicle registrations over longer periods of time.

It allows for payments to be made over three months for bills worth less than $1,000.

Bill Smoothing was launched for existing customers last month. It's set to launch in the coming weeks to new customers.

Management commentary

Payright joint CEOs Myles Redward and Piers Redward commented on the company's activities and its successful quarter. Myles said:

We have a very clear understanding and picture of Payright's competitive positioning and resulting growth opportunities, and we're focused on playing to our key points of competitive difference, being higher price-point BNPL and a more diversified merchant mix. The operational results achieved over the March 2021 quarter clearly show the success of our strategy in underpinning sustainable growth in a rapidly changing industry.

Piers added:

Our ongoing focus on sustainable growth in customers and merchant partners is paying dividends and, we expect that impetus to continue as we continue to expand our suite of products and enhance the online experience and capability.

Payright share price snapshot

While 2021 has been good to Payright's business, the same cannot be said for its share price.

Currently, the Payright share price is down by around 26% year to date. It's also down by nearly 30% over the last 12 months.

Payright has a market capitalisation of around $38.5 million, with approximately 89 million shares outstanding.

The post The Payright (ASX:PYR) share price is soaring 12%. Here's why appeared first on The Motley Fool Australia.

The rising subsector is seen as crucial for the finance industry to winning millennial and generation Z clientele, who are shying away from traditional banking products.

But outside of the young folk, do people even know what brands like Afterpay Ltd (ASX: APT), Zip Co Ltd (ASX: Z1P), Humm Group Ltd (ASX: HUM) and Openpay Group Ltd (ASX: OPY) actually do?

Only 36.9% of people knew about BNPL back in September 2018, according to polling firm Roy Morgan. 

But this week 72.4% of Australians were now shown to be aware of buy now, pay later services. Plus 14.7% actually use a BNPL service.

But it seems one particular company has a massive lead over its rivals.

Afterpay's network effect

Afterpay was the "clear market leader" in awareness, according to Roy Morgan, with 70% of Australians now aware of what it does.

That's a huge lead over second place, which was taken by Zip with 48.6% of Australians knowing about its services.

That's more than 40% daylight between first and second.

Awareness of Afterpay has increased 36 percentage points since the last survey in September 2018. Zip is up 30.5 percentage points.

Afterpay's market dominance becoming more entrenched could be seen as the network effect, where a system becomes more attractive the more people participate.

It's the same phenomenon that's seen Facebook Inc (NASDAQ: FB) become so popular. As more people joined the platform, the more valuable it became and more attractive to those who hadn't yet joined.

The 'second tier' BNPL players, as Roy Morgan labels them, had more modest brand awareness. About 20% of Australians were aware of Latitude Pay, and both Humm and OpenPay just topped 11% each.

Roy Morgan chief Michele Levine said there was definitely a generational difference in the use of the different BNPL brands.

"Although people aged 25-34 are the most likely to use market leaders Afterpay and Zip, the second-tier services provided by Humm, Latitude Pay, and Openpay are all more likely to be used by a slightly older demographic."

COVID-19 pandemic boosted BNPL adoption

According to Levine, the coronavirus outbreak last year created a perfect storm for BNPL industry to thrive.

"Unprecedented stimulus payments from the government, including the $100 billion JobKeeper wage subsidy, supported the economy and led to a boom year for many larger retailers."

Levine cited Australian Bureau of Statistics figures that retail sales increased by an average of 8.8% year-on-year for the 9 month period from May 2020.

"The closure of the international border, as well as domestic state borders for much of the year, prevented spending on travel and tourism and led many to spend on 'retail therapy'."

As well as younger Australians, women are taking up BNPL far more enthusiastically than men.

"Women are the key users of buy-now-pay-later services and have adopted the new fintech digital payment services at almost twice the rate of men while nearly a quarter of people aged 25-34 use the new services – a higher rate than any other age group," said Levine.

Most of the ASX-listed BNPL providers saw their shares spike up on Thursday, just before the Easter long weekend.

Afterpay was up 4.12%, Zip soared 4.61%, Laybuy Holdings Ltd (ASX: LBY) added 4.55%, Humm gained 2.08% and Payright Ltd (ASX: PYR) put on 0.72%. Meanwhile, Openpay dropped 0.84%.

The post Afterpay (ASX:APT) leads Zip by 40% on one critical measure appeared first on The Motley Fool Australia.

At the time of writing, the Airtasker share price is currently sitting at $1.05, up 0.48%. 

Airtasker share price rockets

However, it wasn't all smooth sailing for investors looking to get into this IPO after trading commences (which is almost all retail ASX investors).  Airtasker's share price then went as high as $1.16 a share. This was prior to falling as low as 88 cents soon after market open. This company had a more volatile start to life than a giraffe!

At the time of writing, Airtasker shares are back to $1.02 a share, almost where they started the day.

IPOs can be ART-fully dangerous for new investors

Of course, Airtasker's listing is nothing the ASX hasn't seen before. Last year saw a smorgasbord of new companies hitting the ASX boards. These included Doctor Care Anywhere Group (ASX: DOC), Booktopia Group Ltd (AS:X BKG), Plenti Group Ltd (ASX: PLT), Nuix Ltd (ASX: NXL), Payright Ltd (ASX: PYR) and Laybuy Holding Ltd (ASX: LBY).

With the exception of Doctor Care, all of these companies are today trading below the price they IPOed at. And even Doctor Care was down 17% at one point from its IPO price before recovering. Laybuy has been a clanger, currently more than 47% below its IPO price.

We have seen a similar trend play out in the United States. Companies like Uber Technologies Inc (NYSE: UBER), Lyft Inc (NASDAQ: LYFT), and Snowflake Inc (NYSE: SNOW) have all IPOed in the last couple of years, and have been highly volatile in the months and/or years since.

IPOs can be dangerous things for retail investors to get involved in at the starting gate, despite all of the hype and buzz they generate. Remember, its often the motivation of those pushing the IPO to offload their shares for the highest price possible. So for any investor thinking about jumping on the Airtasker train, it might be prudent to keep all of this in mind!

The post Airtasker (ASX:ART) share price cools after explosive IPO appeared first on The Motley Fool Australia.

What did Payright announce?

The Payright share price is on the move today after revealing three important announcements.

According to this morning's release, the first update Payright advised was the launch of its Bill Smoothing payment option. Bill Smoothing is a direct-to-customer service. The service allows consumers to spread their household bills across a three-month period up to the value of $1,000. This includes utilities, bills, council rates, vehicle registration, car & home insurance premiums, rental payments, and school fees, among others.

The pilot program recorded strong success. Consequently, the options are being offered to all existing Payright customers. However, the company is planning on rolling out the service to new customers in the near future.

Additionally, Payright stated that the Bill Smoothing payment option adds another dimension to its value-added services. The company is seeking to capture the Australian and New Zealand market through its expanded range of products.

Payright co-founder and joint-CEO Piers Redward commented:

With approximately 8.8 million residential gas and electricity customers in Australia, and a total market for electricity bill payments in excess of $9 billion per year, Payright Bill Smoothing offers customers the ability to manage the rising cost of living through an easy and affordable payment plan for their household bills.

Merchant growth

In addition to the new product offering, Payright highlighted that its merchant portfolio continues to grow. The latest inclusions are leading Australian home improvement retailers, Australian Outdoor Living, Stratco, and Into Blinds as well as New Zealand's national electrical retailer, Appliance Plus.

Management noted that Payright's merchant portfolio spans over the retail, home improvement, health & beauty, photography, education, and the automotive industry.

New warehouse facility

In a bid to support future operations, Payright has engaged with Gresham Partners. This partnership has allowed Payright to secure a $100 million wholesale warehouse facility. This follows a recent review of the company's existing funding program.

Management explained that once a new warehouse funding is set up, the company will accelerate new growth programs.

Payright's other co-founder & joint-CEO, Myles Redward said:

Following Payright's successful IPO and the recent extension of our existing loan notes program, we are excited to have secured Gresham's services to assist with the proposed transition to a bank warehouse facility. The combined funding mix will provide us with an enhanced capability to aggressively accelerate growth through merchant and customer acquisition initiatives such as Bill Smoothing, along with a number of other new products scheduled for deployment in the coming months.

Payright share price snapshot

The Payright share price has lost around 35% over the past 12 months. Most of the falls coming from year-to-date. The company's shares reached a high of $1.22 in the middle of last month.

Based on the current share price, Payright has a market capitalisation of roughly $40 million, with 59 million shares outstanding.

The post Here's why the Payright (ASX:PYR) share price is soaring 9% today appeared first on The Motley Fool Australia.

The company listed on the ASX on 23 December 2020 at an IPO offer price of $1.20 per share. Its shares have struggled to deliver value to early investors, having only touched break-even once on 16 February 2021.

What's driving the Payright share price today?

The broader market is facing a heavy selloff today, with the S&P/ASX 200 Index (ASX: XJO) down 2.40% and S&P/ASX Information Technology Index (ASX: XIJ) down an even further 6.40%. 

This has resulted in buy now, pay later shares across the board being sold down. BNPL heavyweights Afterpay Ltd  (ASX: APT) and Zip Co Ltd (ASX: Z1P) are down a respective 11% and 6% at the time of writing. 

The heavy selling and weak sentiment across the board could be a factor pulling on the Payright share price beyond its results. 

HY21 result highlights 

Payright reported its Gross merchandise value (GMV) across Australia and New Zealand was up 84% to $20.6 million. Total customers also increased 25% to 42,300. This was attributed to the company's growth in active merchants and more targeted direct marketing and brand campaigns. 

The company has seen a continued downtrend in arrears down from 3.96% in June 2020 to 2.77% in December 2020. The improvement in arrears and focus on collections efforts have been balanced with managing COVID impacted customer hardship.

Payright's underlying losses relating to 'business as usual' credit defaults are also highlighted to be below the winder industry average. 

How is Payright different? 

Payright specialises in transactions between $1,000 and $20,000. Its current portfolio is a mix across retail, home improvement, health & beauty, photography, education and automotive. This is its key point-of-difference in the rapidly growing BNPL sector. 

The company believes there is a rapidly growing demand for a BNPL service on larger purchases with 55% of surveyed consumers wanting a BNPL option for purchases over $1,000. 

By focusing on more considered purchase items, Payright believes that it targets a lower risk customer demographic that have stronger credit scores representing very low default risk. 

To further accelerate the company's growth, Payright reports it's well progressed in the development of a number of significant and soon-to-be-deployed tech-related growth products and initiatives. 

The post The Payright (ASX: PYR) share price tumbles after maiden results appeared first on The Motley Fool Australia.

But soon after open, investors lit a rocket under the Payright share price, pushing it up to a high of $1.06 (a 10.43% rise). However, the share price subsequently cooled off, but still ended the day at $1.02 a share. That's a rise of 5.73%.

Since we're in the middle of the ASX earnings season, you might assume that this sharp bump might be due to Payright reporting its financial results. But you'd be wrong. 

The company last gave a market update on its business back on 15 January. And that was a quarterly business update. Indeed, there has been no major news out of this company since 3 February. That was when Payright detailed a loan facility that the company has entered into.

So what's going on?

Well, it's not exactly clear. Payright is an ASX buy now, pay later (BNPL) company. It provides higher-value BNPL services on the more expensive products that the 'mainstream' BNPL providers like Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) don't cover.

It's been growing at a healthy pace to be sure. Back in that quarterly update in January, Payright told investors that its gross merchandise value came in at $20.6 million, which was up 28% on the prior quarter. It also grew its customer base by 13% over the same period.

But the markets already knew that.

Could today's lift be put down to speculation? That wouldn't be a new scene that Payright investors. Just last week, the company got a 'speeding ticket' from the ASX after its shares raced 32% higher in one day, for no apparent reason at all. We saw a similar phenomenon occur in other ASX fintech and BNPL companies. That included Zip Co, as well as Novatti Group Ltd (ASX: NOV) and Douugh Ltd (ASX: DOU).

About the Payright share price

At today's close, the Payright share price gives the company a market capitalisation of $90.44 million. Although the shares have given investors a lot of substantial gains over the past week or so, the current share price is actually the same as the price that Payright IPOed at back in December.

The post What on earth happened with the Payright (ASX:PYR) share price today? appeared first on The Motley Fool Australia.

These moves have prompted a 'please explain' speeding ticket from the ASX soon after lunchtime today. This is standard procedure form the stock exchange if a company experiences a seemingly unprovoked share price rise of that kind of magnitude.

In response, Payright issued a release in which it confirmed in rather direct language that it has no idea what would have caused this surge in share price and trading volume. Here's the gist of what Payright told the ASX: "No. The Company is not aware of any reason for the recent trading activity in the Company's securities".

The last market release that Payright gave the markets was back on 3 February. That release detailed a loan facility that the company has entered into, so we can probably assume that has nothing to do with today's moves. So what's going on?

FOMO for Payright shares?

Well, a number of companies in the same payments/fintech space as Payright have seen very similar moves to what thie company has seen today. Yesterday, we discussed how companies like Douugh Ltd (ASX: DOU), IOUpay Ltd (ASX: IOU), and Novatti Group Ltd (ASX: NOV) had all seen double-digit share price rises for no obvious reason. In fact, all 3 of those companies subsequently received speeding tickets from the ASX as a result. The share at the forefront of these rather strange moves appears to be buy now, pay later (BNPL) giant Zip Co Ltd (ASX: Z1P). Zip shares had a corker of a day yesterday, rising more than 17% (despite no major news out form the company). The shares added another 13% this morning before Zip itself got a speeding ticket of its own from the ASX.

These moves almost certainly have nothing to do with these companies' fundamentals. So perhaps investors are seeing some very committed momentum trading in this space and trying to buy in ahead of the curve. These kinds of things can set off a chain reaction of sorts as momentum investors try and jump on the bandwagon and make a quick profit before things cool down again.

The post Payright (ASX:PYR) shares get speeding ticket after 32% surge appeared first on The Motley Fool Australia.

In morning trade, the Payright share price is up 5.8% to 90 cents.

What driving the Payright share price higher

For the period ending December 31, Payright revealed strong quarter-on-quarter growth in gross merchandise value (GMV) and customer numbers across the Australia and New Zealand region.

Total group GMV came to $20.6 million for the quarter, up 28% on the prior corresponding period.

The buy now, pay later (BNPL) provider attributed its solid performance to a direct strategy of offering higher-value purchases to its customers.

In addition, the business expanded its customer base to 42,300, which represented a lift of 13% on the September quarter. This was underpinned by Payright's approach in adding new merchants to its growing portfolio, which in turn harnessed new customers.

The company signed 256 agreements in the December period complementing its 2,800-merchant partnerships. Payright is currently tapped into the retail, home improvement, health and beauty, photography, education and automotive sectors.

The company further noted that it is uniquely positioned throughout Australia and New Zealand as a high-value 'considered' purchases provider. Offering between $1,000 to $20,000, Payright highlighted its product differentiation to existing players in the BNPL market. Higher-value purchases allow customers to pay for more expensive products and services that are not available from other BNPL providers.

Management commentary

Payright Co-CEO  Piers Redward, welcomed the results, saying:

In addition to the strong momentum across our target markets, the progress we are making in New Zealand is clear evidence of the significant opportunity for Payright to assist businesses which are seeking a consistent solution across both geographies. We believe this will help to further strengthen our position in Australia, particularly in relation to merchants which operate across both countries.

Payright Co-CEO Myles Redward added:

The growth we are seeing is a direct outcome of the strategy we are pursuing. This includes complementary customer and merchant acquisition strategies to keep growing our penetration rates across both geographies and across our key industry sectors, as well as the enhancement of integrated technology solutions spanning ecommerce, marketplaces and point of sale software designed to accelerate our growth agenda.

The post Why the Payright (ASX:PYR) share price is storming higher today appeared first on The Motley Fool Australia.

Payright Limited (ASX: PYR) will start trading 11am AEDT on Wednesday after selling out its initial public offering (IPO) at $1.20 per share. The business will float with a market capitalisation of about $107 million.

The fintech will make it on to the bourse just before a quiet time over Christmas.

The Motley Fool spoke to co-founder and executive officer Myles Redward, who said the stock market was currently welcoming of new entrants.

"There's a lot of positive sentiment, particularly for our sector buy now, pay later," he said.

"It really was a case of trying to capitalise on that sentiment. Take advantage of the stock prices we're seeing more broadly."

Who can blame him. 

Afterpay Ltd (ASX: APT) shares are up 270% so far this year, and more than 1,335% since the March COVID-19 crash. Zip Co Ltd (ASX: Z1P) is up 48% year-to-date and more than 340% since its March trough.

How Payright is different to other BNPL

According to Redward, his business' main moat is that it targets a different consumer compared to most other BNPL providers.

"If you look at most of the micro-ticket buy now, pay later providers, we're talking sub-$1,000. Typically have average transaction sizes ranging from $150 to $500," he said.

"For us, our average transaction size is about $3,000."

So rather than clothing or small appliances, Payright users are paying for home renovations, health and beauty, or even higher education fees.

In fact, education contributes 34.1% of the gross merchant value that runs through the Payright system – the highest of any sector.

"Being a higher price point, it lends itself to a wider range of industry types, more diversified."

To mitigate the risk of lending out bigger amounts of money, Payright does have to be more discriminating about the end users it lends to.

"We do put our applicants through a more robust credit assessment process," Redward told The Motley Fool.

"So we do credit checks through Equifax Inc (NYSE: EFX), we consider a range of stability and capacity type measures and inputs… We ID-verify to safe harbour standards."

Payright's post-IPO plans

The IPO was set to raise $10 million or up to $20 million if it was oversubscribed.

Payright ended up landing $18.5 million. Combined with a pre-IPO capital raising round a few weeks ago, it now has $25 million to play with.

The money will be spent on sales and marketing, product development and technology – all in the name of growth, according to Redward.

"The reason we're doing the IPO is to really accelerate and turbo-charge that growth over and above what we've been able to achieve."

Revenue did rise close to 190% for the 2020 financial year compared to 2019, but it was coming off a low base. The business made a $8 million net loss off a turnover of $9.85 million for the year ending 30 June.

Australia remains the priority market, although its nascent New Zealand operations have just reopened after pausing during the first COVID-19 outbreak.

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