Is business to business the next opportunity in the buy, now pay later sector?
Openpay (ASX:OPY) is the newest buy now, pay later stock on the ASX having listed in December.
But the share price success that its competitors have seen has so far alluded it.
While Splitit (ASX:SPT) went as high as $2 from 20c and Sezzle (ASX:SZL) nearly doubled on its opening day and still sits nearly 60 per cent higher than its listing price, Openpay has shed a quarter of it’s pre-IPO value since listing.
Still, Openpay CEO Michael Eidel is content with having listed.
“We are strongly growing, we raised $50m in the IPO that helps us grow the business — we see additional opportunities — and we have the firepower to make it all happen,” he told Stockhead.
“Equally important, we raised our profile in the market, it’s not just all about Zip and Afterpay — the media and merchants reach out to us directly.”
Eidel believes one specific market opportunity will help it stand above its peers. While the other companies are focused on business to consumer (B2C), Openpay intends to launch a business to business (B2B) product later this year.
In its most recent presentation it merely said it was in late-stage development but Openpay’s boss believes it will be worth the wait.
“This opens the door to a completely new business, we will help them [businesses] manage their trade accounts from end to end,” he said.
“It’s a simpler way for enterprise retailers to do business, although in that sense it’s not a BNPL product, it’s more a SaaS – enterprise payment as a service.
“It speaks to the need of large retailers, making experiences with their customers easier and slicker.”
For now, the company is still focused on B2C. But Openpay says it’s different from its bigger competitors.
“If you think of Afterpay, it’s a shorter time and the lower value end,” Eidel said. “We cover plans for $20-$25,000 and for two-24 months.”
“Also we are not only focusing on retail but in other industries like healthcare and automotives and this comes with different customers.”
Eidel said in contrast other platforms’ users tended to use it simply as a replacement for credit cards, whereas Openpay customers use the platform to pay back things over time.
“Our customers’ median age is 38 while our competitors are younger. They’re using us as a budgeting tool by spreading out payments,” he said.
“Think of a young couple getting married and needing furniture, that is where we come in.”