The Ioupay Ltd (ASX: IOU) share price soared 10% in early trading in response to a new partnership.
IOUpay provides fintech and digital commerce software solutions and services, largely in South East Asia, that enable its institutional customers to securely authenticate end user customers and process banking, purchase and payment transactions. It includes a buy now, pay later offering.
What’s the new IOUpay partnership?
IOUpay said that it has entered into a ‘strategic teaming agreement’ with MYP1 Commerce, to connect MYP1’s merchants to IOUpay’s buy now, pay later platform.
This partnership is for a one-year renewable term where MYP1 is contracted to refer and acquire its merchants to onboard and utilise IOUpay’s buy now, pay later payment service offering. IOUpay’s BNPL merchant app services will be integrated across 15,000 merchants’ point of sale terminals.
Under the agreement, IOUpay is also able to act as a master merchant for MYP1 to onboard IOUpay originated merchants to utilise MYP1’s terminals.
There is no money or consideration being paid by IOUpay to MYP1 for entering into this agreement.
One of the benefits of this deal is that MYP1 has a significant in-field merchant sales and support presence as well as a national merchant services team, which will give the ASX company a valuable, experience, data driven and well resourced team to partner with and quickly deploy the services.
When will this start?
IOUpay and MYP1 will commence integrating systems with BNPL payment processing capabilities in April followed by a scheduled rollout initially to 2,800 jointly selected MYP1 merchants over the rest of 2021 with the rest vetted and accepted by IOUpay scheduled for rollout in 2022.
Management said initial merchant onboarding and rollout will consist of carefully selected priority merchants for quality control and transaction volume and profit purposes, considering the size and scope of MYP1’s existing merchant network.
Thoughts about this deal
Taking market share is a key part of the game for buy now, pay later operators like IOUpay. So this is another good deal that helps the business expand further in the Asian market.
The IOUpay share price has been steadily dropping since the peak in the middle of February 2021 of $0.70. It’s now just $0.40. Although share prices are quite volatile with BNPL players.
It could be one to watch if it keeps winning Asian deals like this, but I’m not sure I’d classify as one of my favourite ASX growth shares just yet.
