It wasn’t a pretty day for the ASX buy now, pay later (BNPL) sector at large. The Zip Co Ltd (ASX: Z1P) share price was crunched by 14%, the Sezzle Inc (ASX: SZL) share price slid 10%, while Afterpay Ltd (ASX: APT) shares dropped nearly 4%.
But Openpay Group Ltd (ASX: OPY), one of the smaller players, bucked the trend, climbing nearly 5% as the company announced a new partnership.
Before we get into the announcement, it would be remiss of me not to acknowledge the recent bumper performance of the BNPL sector.
Towards the end of last year, the Afterpay share price left its smaller rivals in the dust as investors clamoured to get their hands on the market darling’s shares.
Now, it seems as though a few of its BNPL peers are finally receiving some love. The Openpay share price has jumped 48% so far this year, Sezzle shares have surged 68% and formerly-bruised Zip shareholders have enjoyed 126% year-to-date returns.
So, today’s steep share price falls are likely the result of some investors taking profits off the table. The past 12 months have shown that whichever direction the share prices move, volatility is part and parcel of being invested in BNPL shares.
Now, onto Openpay’s announcement…
Officeworks opens its doors
This morning, Openpay revealed it has launched a partnership with Officeworks, under which Openpay’s payment plans will be rolled out nationwide across Officeworks’ brick and mortar stores and online platform.
Looking at Officeworks’ website, it appears as though the online integration has gone live, with the Openpay logo shown as a payment option alongside rivals Afterpay and Zip. The in-store solution is expected to be rolled out next month.
In today’s ASX release, management highlighted that this partnership adds to Openpay’s portfolio of merchant agreements, with major Australian brands recently signed and live including Kogan.com Ltd (ASX: KGN), Surfstich and Dick Smith.
Management commentary
Commenting on the announcement, Openpay chief executive Michael Eidel said:
“By partnering, we can provide a great budgeting tool to help families get their school and work needs sorted, while supporting Officeworks to ‘help make bigger things happen’ for their customers. This approach fits nicely with the higher-value, longer-term plans that we can offer to customers and responds to the growing trend for interest-free instalment payments.”
Now what?
Openpay recently announced its Q2 results, reporting tremendous growth rates across a number of different metrics.
Of note, the company shed details on its upcoming rollout in the lucrative US market, stating its California-based US company, Opy, was in advanced discussions with strategic partners. Openpay said negotiations were in progress with potential funding partners, payments processors and foundational merchants in core verticals.
Investors will be keeping a close eye on the commentary around this US business when Openpay reports its half-year results later this month.
If you’re keen to learn more about the booming BNPL sector and the various players within it, check out our in-depth BNPL report.
