The Openpay Group Ltd (ASX: OPY) share price is on watch today after announcing an agreement with a global payments provider.
What is the Openpay agreement?
Openpay has announced that it has secured an agreement with global payments provider, Worldpay from FIS, part of the global financial products and services group Fidelity National Information Services Inc (NYSE: FIS).
Under the agreement, Openpay said the two companies will work together to build a commercial relationship.
There are three things that Openpay highlighted. The parties would collaborate to offer flexible ‘buy now, pay smarter’ payment products and other solutions to merchants and customers in territories in which Openpay operates.
Openpay products will be integrated onto the payment Gateway operated by Worldpay, which would mean Openpay products can be offered to FIS’ merchants and enable those merchants to implement Openpay’s offerings quickly and seamlessly.
The third thing that Openpay said is that it will use Worldpay from FIS as its merchant acquirer in the USA and in other territories where the integration has been implemented.
But Openpay emphasized that the initial focus of the two companies will be on the US market.
Company comments
Openpay said the following about its progress in the USA:
“Whilst further work remains to be done to agree the terms of detailed sub-agreements in respect of the above, Openpay believes that the agreement reached thus far demonstrates, in particular, substantial progress in Opy USA’s ongoing efforts to deploy six strategic pillars – offering a differentiated BNPL solution through a large-scale, sustainable ecosystem via partnerships with banks, processors and a large on-line marketplace.”
My thoughts about this
The key thing for buy now, pay later growth right now is taking market share. There are a lot of different competitors and it’s a huge potential market when you think about western markets.
Will Openpay be able to win over the long term against others like Affirm, Klarna, Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P)?
It’s not an investment bet that I’d want to make right now, particularly with the prospect of higher interest rates over the next few years.
But there could be some other ASX growth shares that are worth researching.
