The Buy Now and Pay After (BNPL) Trends have recently been boosted by Silicon Valley giants Apple jumped into the arena.. Known for its keen understanding of the pulsations of global consumer trends, iPhone makers aim to ride a new wave of consumerism with their own BPNL products.
Demand for interest-free installment products has exploded in recent years.As a result, the BNPL market Soaring to US $ 656 billion by 2026, It is supported by our tendency to be instantly satisfied.
While Apple’s entry into BNPL adds some competitiveness, the following incumbent players are in a good position to maintain their advantage. Their global footprint, early leads and strategic partnerships with major retailers will continue to attract consumers.
Online card and payment processor Marqeta (MQ) Provides the infrastructure and tools needed for digital, physical, and tokenized payments without the need for traditional banks. Clients include companies such as DoorDash, Klarna, and Block.
The Marqeta card issuance platform provides customers with the infrastructure and application programming interface (API) they need to build and quickly deploy innovative card payment systems. According to Morningstar’s Equity Report, “The unique features and flexibility of Marketa’s platform have allowed us to succeed in fintech and tech companies. Buy by postpaid companies and blocks are the most notable. I will. “
Growth may slow from its 2021 highs, but Marqeta will continue to enjoy strong revenue growth, “driven by exposure to postpaid customers and high-growth companies like Brock.”
Marketa had Strong first quarter performanceThe quarterly total throughput (TPV) was $ 37 billion and net sales were $ 166 million, an increase of 53% and 54%, respectively, from the same period in 2021.
But this growth hasn’t fixed the problem of a non-diversified customer base, Morningstar stock analyst Michael Miller warned that the fair value of the stock was fixed at $ 13. increase. “The company is heavily exposed to block, postpaid companies, and food / delivery services that drive significant growth from its existing customer base,” he says.
Miller argues that Brock will continue to be Marketa’s main customer, but the company adds that “it can diversify its customer base with new customers and pay growth from purchases later.” rice field.
Payment pioneer PayPal (PYPL) Accumulated 426 million active accounts at the end of 2021. This includes 34 million merchant accounts. It also owns Xoom, an international money transfer business, and Venmo, a P2P payment platform.
PayPal Buy Now, Pay Later (BNPL) services increased by a staggering 256% in the first quarterCompared to the same period in 2021, more than 18 million consumer accounts are currently using the product.
Build on it 4 payments Service launched in 2020, the company recently rolled out More flexible monthly payment BPNL products This allows customers to pay for their purchases in installments of 6 to 24 months.
“PayPal’s development of a network of both merchants and consumers in the early days of the evolution of e-commerce has helped the company build and maintain its enviable competitiveness,” said the latest report.
“PayPal is still a somewhat unique player in the payments space,” said Brett Horn, a stock analyst at Morningstar.
Given the global macro headwinds, growth could slow in 2022, but “PayPal is on the path to better growth over the next few years, embarking on a long-term shift to electronic payments. , We can continue to grow steadily over the long term, “says Horn. He recently reduced the fair value of shares from $ 145 to $ 139 per share, prompted by short-term headwinds.
Previously Square, Block (SQ) Along with related services, we will provide payment acquisition services to member stores. The company also owns Cash App, a P2P payment network, with operations in Canada, Japan, Australia and the United Kingdom. Outside the United States, it generates about 5% of its revenue.
In early 2022, Brock acquired Afterpay for US $ 29 billion to expand BNPL’s presence.
“Strategicly, all-stock trading to buy afterpay brings the company’s business model closer to PayPal’s business model, strengthening the bond between cash app and seller business, and making it more specific. It looks like another move to create a two-sided platform, “says Morningstar’s stock report.
Given the success of PayPal with this approach, the report adds that this is a viable strategy.
In the first quarter of 2022, the first since the acquisition of Afterpay, the BNPL platform generated US $ 130 million in revenue and US $ 92 million in gross profit. Company memo To investors.
Block has integrated Afterpay’s BNLP capabilities with US and Australian sellers and cash app businesses. Nearly 13,000 Square merchants adopted and processed BNPL sales in the first quarter, adding 10% more active sellers to postpay.
“Square has grown dramatically over the years and is not consistently profitable, but its position in the niche is solid and will generate attractive profits over time. We are approaching the stage where we can do it, “says Horn. He recently reduced the fair value of stocks from $ 124 to $ 104, prompted by lower long-term margin assumptions.
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