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From Financial Review, 有点长。
Buy now, pay later chiefs try to calm investors
The bosses of Sezzle, Zip and Splitit moved to assuage investor fears about the impact of PayPal's entry into the buy now, pay later market in the US as share prices across the sector sank anew on Wednesday.
Sezzle shares opened 15 per cent lower after being smashed by the same amount on Tuesday amid a sector rout and were down 6 per cent at $8.22 mid-afternoon. But its CEO, Charlie Youakim, said more intense competition was expected and that the market was big enough for multiple players.
Sezzle founder Charlie Youakim: "There is more than room for multiple players." Wayne Taylor
"We always expected further competition in the buy now, pay later space and we are more than prepared for it," he said.
Afterpay shares opened down 10 per cent after 8 per cent losses on Tuesday, before settling to be down 3 per cent at $81.59 in the afternoon session.
Zip Co was hit the hardest, falling a further 17 per cent early on Wednesday after a 12 per cent loss on Tuesday, and was down 12 per cent at $7.05 later in the trading day as Citi downgraded its rating to a "sell".
The savage sell-off is occurring after PayPal, which has 190 million active accounts in the United States, announced on Monday a new product with exactly the same features as Afterpay and Sezzle – but at a lower cost to merchants.
PayPal's 'Pay in 4' will launch in the fourth quarter of this calendar year, offering its 190m US users the same product as Afterpay. Bloomberg
"The buy now, pay later sector in the US is very nascent compared to Australia and there is more than room for multiple players," Mr Youakim said.
"We're constantly evolving and adapting to the needs and wants of our consumers, rolling out new products, and expanding into new geographies."
Zip co-founder Larry Diamond also sought to calm the market, saying the PayPal move would help increase awareness of the instalment option.
"It is great validation that buy now, pay later is here to stay permanently as a true disrupter to the credit card," he said. "It will become mainstream. As the overall pie increases, we are very well placed to capitalise on the increasing and rapid awareness."
Splitit, meanwhile, fell 7 per cent to $1.60 and Openpay (which does not operate in the US) dropped 10 per cent to $3.63, reversing strong gains over recent months.
Splitit chief executive Brad Paterson said the company had a unique model making it complementary to other providers, including PayPal. "We see PayPal joining the sector as a positive for Splitit as they accelerate acceptance of instalments as a payment option around the world," he said.
Taking on a Goliath
But analysts are highlighting the American payment giant's almost-ubiquitous presence as a concern for Afterpay, Zip and Sezzle customer and merchant growth rates. Their share prices are largely tied to growth in the US.
Investors are worried merchants will seek to negotiate down the higher fees charged by Afterpay, Sezzle and also QuadPay – which Zip has just taken over – which will squeeze the 'net transaction margin', the key earnings driver.
PayPal's new product will be provided at the same, standard pricing as its online purchases: 2.9 per cent of sales. This compares with an average cost for Afterpay of about 4 per cent of the cost of goods sold, 6 per cent for Sezzle and about 7 per cent for QuadPay.
The dance of the elephants has started.
— Grant Halverson, McLean Roche payments expert
Macquarie said on Wednesday that PayPal appears to be a lower-cost offering for both merchants and consumers for a very similar product to QuadPay.
"A lack of differentiation could limit the ability for QuadPay to increase their customer numbers at the same rate as larger peers. Given PayPal’s size, they have the balance sheet to compete and extend the path to profitability for smaller players," it said.
Part of the sharp share price declines reflects the need for more investment to encourage retailers to integrate with them in addition to PayPal.
Zip founder Larry Diamond: "Our ability to move quickly has and will always separate us from the global payment elephants". James Brickwood
Forbes reported overnight that PayPal could undercut the competition on fees by leveraging its already dominant, highly profitable payments network.
About 80 per cent of the top 100 retailers in the United States allow customers to pay with PayPal, while nearly 70 per cent of all US online buyers have PayPal accounts. The new "Pay in 4" option will appear automatically as an option in users' PayPal wallets.
Not just PayPal
Competition in the US is not only coming from PayPal, but also major investment banks and traditional credit card companies.
Citi announced on August 3 a deal with Amazon to provide instalment products on its platform, while American Express is rolling out its own product dubbed "Pay It Plan It", which allows users of its mobile app to split up larger purchases of $100 or more into equal monthly payments with a fixed fee of up to 1.33 percent and no interest.
"The dance of the elephants has started," said Grant Halverson, a payments expert at McLean Roche.
Other fintechs ramping up, including San Francisco-based Affirm, which announced earlier this year a Shop Pay Instalments partnership with Shopify, a huge e-commerce platform; and Swedish-based Klarna, which said last week it is seeing 45,000 app installs a day globally, three times as fast as the same period last year and its app has 1.2 million monthly active users in the US.
“While we see potential for two to three buy now, pay later players to coexist, like most online verticals, we see it as a winner takes most market," said Citi analyst Siraj Ahmed.
UBS analysts said in a report last week, following Afterpay's full-year results, that “low barriers to entry, the relative ease of replicating Afterpay's product offering and competition from other payment methods leave it vulnerable to competition".
Sezzle earned $17 million from merchants on $307.4 million of sales, delivering a net transaction margin of $5.1 million, or 1.7 per cent of sales.
Mr Youakim said there was still plenty of opportunity to grow this, given buy now, pay later makes up just 1 per cent of the e-commerce payment mix in the US, compared to 8 per cent in Australia, with e-commerce comprising 12.5 per cent of a $5.4 trillion retail market. "The market is enormous," he said.
Zip shares are being hit as it announced on Tuesday the acquisition of QuadPay and an up to $200 million capital raising for US growth. Citi said its ‘Shop Anywhere’ product could come under pressure from PayPal. Meanwhile, Macquarie raised concerns about additional dilution from the QuadPay deal after Zip's falling share price forced it to issue more shares to pay for it.
"Given PayPal’s near ubiquitous merchant presence, the risk is that consumers may not be willing to pay an additional fee to use QuadPay at merchants that offer PayPal, which in turn could negatively impact QuadPay’s net transaction margins," Citi's Mr Ahmed said.
But Mr Diamond said the QuadPay deal made sense and its "investment in innovation and ability to move quickly has and will always separate us from the global payment elephants". |
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【摄出你的足迹】- 参加自己发起的活动 (2013-1-7) 老陶 
楼主:mcexplorer
发表于 2020-9-2 14:36
