Shares of provider BNPL Afterpay jumped 32% last month.
Shares of buy now pay later (BNPL) leader Afterpay (ASX: APT) are normally among the most traded stocks in Australia. The stock was also among the biggest winners on ASX cards on Thursday, jumping 6.3% to $ 130.60 at the time of writing.
Why the Afterpay share price is higher today
After payment announced that it will issue virtual cards through its app in the United States, which will allow its users to shop at a wider range of retailers, including those who have not registered directly with the company.
U.S. customers will now be able to generate a single-use card to use at checkout for businesses including Amazon, Nike, Target, Sephora, Macy’s, Victoria’s Secret, Nordstrom and Walgreens, among others, the company said in a statement. hurry.
The 12 brands account for almost half of all e-commerce volume processed in the United States, Afterpay said, noting that e-commerce growth in the United States had almost tripled in the first 3 months of 2021.
Indeed, the United States has been a key growth market for Afterpay since joining there in 2018, and the introduction of the new service puts it in a more solid position against rivals Zip Co Ltd (ASX: Z1P). , Sezzle (ASX: SZL) and Klarna.
Klarna pioneered the use of virtual card technology which allows the BNPL provider’s app to be used to make purchases anywhere. Customers of Quadpay, owned by Zip Co, which operates in the US market, already use a virtual card at any point of sale that allows the use of a Visa or Mastercard. Both operators have seen an increase in transactions.
Last month, Sezzle also expanded into the United States, the world’s largest retail market after announce a 3-year agreement with US retail giant Target to deliver its interest-free payment plans in-store and on Target’s digital platforms, giving it substantial reach and customer base.
Meanwhile, analysts expect competition from BNPL to intensify further as more players take advantage of the strong global economic recovery after the vaccine rolls out. Financial industry heavyweights such as PayPal and the Australian Commonwealth Bank have already announced their own BNPL segment plans.
Despite this, Afterpay shares have seen a strong comeback in recent weeks. The stock has now registered an astonishing 32% rise in the last month alone, with investors feeling reassured about its growth prospects.
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