Afterpay Touch Group Ltd (ASX: APT) has a plan to conquer the healthcare market and boost its share price further.
Afterpay Touch is the owner of the popular “buy now, pay later” app. As of early 2019, Afterpay had over 4 million registered users worldwide, making it one of Australia’s true technology success stories.
Afterpay’s Health Care Plan
The leading buy now, pay later company plans to expand significantly into the health care arena. Pharmacies, GP clinics and radiology will soon be places where the service can be used according to the Sydney Morning Herald.
Afterpay has already rolled out to optometrists and dentists over the past year, so it would make sense to go to health care providers that don’t bulk bill.
One of the main reasons that Afterpay sees a potential benefit from making this expansion is that a growing number of people are ending their private health insurance, but may still want assistance in paying for the health care service, such as splitting up the payments.
The SMH quoted Afterpay’s Head of Healthcare Mathew Cagney, “With more than 11 million Australians not having access to ‘Extras’ cover, we are meeting a genuine need – and for those that do have cover, there is nearly always going to be a gap payment that needs to be made.”
Does This Make Afterpay A Buy?
Every time that Afterpay can increase its total addressable market (TAM) it increases the growth potential and the number of merchants that it can earn a fee from.
For a country that tries to provide a high level of public health cover, I’m not sure that growth of Afterpay in this area is a particularly positive thing, as it would suggest healthcare is moving towards being unaffordable for more people. I wouldn’t want to see the Australian healthcare system start moving towards the American one. But, it is a clever move by Afterpay.
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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).
At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.