Sezzle gets a boost in the race to dominate US BNPL space after Target green light
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As late as a couple of years ago, the US was relatively new to BNPL generally (even among fintech investors) but now there is a race between BNPL companies to get a foothold.
Indeed for Afterpay, North America is now a larger market than Australia and New Zealand combined and the company has consequently been eyeing off a US listing. And since acquiring Quadpay, Zip Co (ASX:Z1P) has identified the division as providing the strongest contribution to growth.
But don’t discount other players. Minneapolis-headquartered Sezzle’s shares rose today after America’s Target (NYSE:TGT) agreed to offer Sezzle to its customers.
The deal runs for three years and follows the conclusion of a Proof of Concept Trial with Target which began in September last year.
Target in the US has no relation to Australia’s Target. It is the eight largest US retailer making US$93.6 billion ($120.83 billion) in revenue and US$6.5 billion ($8.39 billion) in operating income in 2020 – which are 20 per cent and 40 per cent higher than 2019 despite COVID-19.
The deal caps off a big few weeks for Sezzle, entering into the interest-based lending space, launching a solid March quarterly which saw a 30 per cent gain from December and revealing plans to list on the NASDAQ.
Sezzle shares rose over 21 per cent this morning and are nearly 600 per cent up from the company’s IPO in July 2019.
humm (ASX:HUM) also announced news and got a modest share price boost.
Today it announced the launch of a digital card (TAPP) that will allow shareholders to tap their digital wallet to make a purchase at any humm merchant regardless of the instore point of sale system.
While BNPL integration can take several weeks, humm says this will free up time and resources for merchants and was an upgrade for customers.
“TAPP removes the need for mechants and humm to invest tens of thousands of dollars and several months integrating into in store point of sale systems,” CEO Rebecca James said.
“With immediate access to transacting humm customers, TAPP makes it easier and more attractive for merchants to include humm as an instore payment option.”
The service will also make money from merchant service fees, just like other humm transactions.