The Afterpay Touch Group Ltd (ASX: APT) share price is up 1% in early trade after providing the market with an AUSTRAC update.
Afterpay Touch is the owner of the popular “buy now, pay later” app. As of mid 2019, Afterpay had over 4.3 million registered users worldwide, making it one of Australia’s true technology success stories.
Afterpay’s AUSTRAC Update
The Afterpay share price is up after giving an update about its Anti-Money Laundering and Counter-Terrorism Financing (AML / CTF) issue.
Afterpay has appointed Mr Neil Jeans from Melbourne based AML / CTF business Initialism as the external auditor to carry out the audit. Mr Jeans was one of the three specialist auditors nominated by Afterpay in accordance with the notice issued by AUSTRAC.
Afterpay now has until 24 September 2019 for the interim audit report and 23 November 2019 for the final audit report.
Why Is Afterpay Being Audited?
AUSTRAC wants the auditor to focus on the period from 19 January 2015 to date to make sure that it is/was being compliant in terms of anti money laundering and counter terrorism financing.
Of course Afterpay has defended itself but acknowledged that the buy now, pay later sector is new a industry now just for customers but also for regulators. It wants to develop leading compliance regime specific for its business in a transparent and cooperative manner.
One of the things that Afterpay pointed to as a feature to help control AML / CTF is a maximum of $1,500 per transaction. And the company is continuing to invest in other compliance enhancements. Despite the changes, Afterpay doesn’t expect any impact to arise on the way customers and merchants experience the Afterpay service?
Is Afterpay A Sell On This News?
The result of this audit is unknown and then what AUSTRAC will do is another factor. So I wouldn’t say it’s a buy or sell based on today’s news. But I am more worried about the growing amount of competition in the sector from Zip Co Ltd (ASX: Z1P), FlexiGroup Limited (ASX: FXL) and others.
I’d rather buy shares of one of the growth shares outlined in the free report below instead.
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