BNPL names on the back foot early in FY20

Stock

AfterPay (APT) $24.12 as at 01/07/2019

Zip Co (Z1P) $3.11 as at 01/07/2019

Event

After a stellar FY19 performance, shares in the buy now pay later (BNPL) space have started the new financial year off on the back foot. Both Z1P and APT are trading lower today on the back of news Visa will look at pushing into the space. Zip & AfterPay were up 283% and 168% respectively for FY19, some of the best across the ASX.

The card provider released a press statement late in the session on Friday that threw prices in the two local providers into disarray. Although Visa is not a product provider, it plans to introduce options to pay in instalments through the issuers that offer their cards.

Clearly Visa has the upper hand in terms of customer access, with millions in Australia, and billions of customers already using their products globally. The announcement though is very light on detail, and only targets 2020 as the launch of trial options but any suggestion that a company of this size and reach would be eyeing off the plunge into BNPL should have investors nervous.

AfterPay (APT) Chart

Afterpay Touch (APT) Daily Chart

Market Matters Take/Outlook

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