Buy now, pay later, investors should buy the best deals

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Square bet on Afterpay the future of “buy now, pay later” and bought it for $ 29 billion. Investors should spread the tip.

The transaction boosted stock market purchases as well as online payment baskets. Affirm Holdings and Zip Co. Shares of other so-called BNPL players, including, skyrocketed after the deal, despite their huge rivals teaming up with Square. Square’s willingness to pay bonuses to one of its peers exaggerates concerns about the commoditization of payouts and indicates that the market is generally poised for significant growth. Seems to be.

As much as it seems counterintuitive, there are certainly reasons to stay up to date. Not all BNPL providers do exactly the same. For example, Affirm also offers larger, longer-term POS loans for large purchases. Overall, BNPL is expected to account for less than 3% of global e-commerce, with around half of BNPL users recently surveyed using multiple services, according to payment research firm Stratwhecker Group. Therefore, there may be room for the volume to continue to grow exponentially. Additionally, according to Rob Wildhack, an analyst at Autonomous Research, Affirm may well exceed $ 70 per share, even at relative discounts, based on futures sales multiples acquired by Afterpay.

There may be interesting offers elsewhere. On the one hand, PayPal Holdings fell this month. Nonetheless, PayPal also offers payments through the payment button, competing in some ways with Square to provide payment services to merchants. However, PayPal payouts are already working in your wallet, so you don’t necessarily need an additional merchant buy-in to add more volume. Given the widespread awareness of BNPL among consumers, PayPal is very likely to be a beneficiary.

Shopify, Square’s other occasional competitor for merchants, will also be down in August. Again, Shopify offers installments through the Shop Pay service, which could be lifted by BNPL’s uptrend. In particular, Affirm is a small, short-term payout partner that competes with Afterpay.

Buy now, pay later, investors should buy the best deals

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