FlexiGroup Limited (ASX: FXL) has announced a strategic partnership with Mastercard and provided a business update at its AGM.
FlexiGroup is a business that provides a buy now, pay later service called humm, as well as revolving credit and SME finance.
Partnership with Mastercard
The company announced a partnership with Mastercard to globally expand the application and distribution of bundll, which FlexiGroup says is the world’s first buy now, pay later everywhere platform.
Already live in Australia, bundll allows customers to buy now, pay later anywhere that Mastercard is accepted and put their purchases into instalments with its budgeting services.
Under the agreement, Mastercard will work with its partners to drive adoption and will support the development of the open-loop, work anywhere, pilot.
This agreement is for five years and is expected to deliver a sustainable growth path for humm, at the same time as expanding the services that schemes can provide to customers.
Mastercard Australiasia Division President Richard Wormald said: “While there are lots of BNPL platforms around the world, this latest development for bundll is differentiated in the way it is able to partner with existing banking systems and provide BNPL technology and products without needing to sign up local retailers, while still generating a sustainable revenue stream. With the growth of BNPL, Mastercard understands that many issuers around the world are looking to solve for this increasing customer preference.”
FlexiGroup explained that it offers a turnkey solution for banks and other card issuers around the world. You don’t need to sign up merchants or integrate into legacy bank systems, and it will work in any regulatory environment.
This partnership is the first announcement of humm ventures, which is designed to create innovation between the company and new partners.
Business update
FlexiGroup said that it saw its 30+ day arrears decrease across the board in the first quarter of FY21.
In light of the improved credit performance, FlexiGroup said it expects its profit to be higher than the $34.5 million generated in the FY20 first half.
It continues to win new merchants. In renewables, it has an exclusive 2-year deal with AGL Energy Ltd (ASX: AGL) to provide long term finance solutions for a combined solar and battery system.
New partnerships with BigCommerce, Striven and Readysell POS will provide over 60,000 new merchants with access to the humm platform. Some other FY21 partnerships include Australian Pharmaceutical Industries Ltd’s (ASX: API) Priceline, Kogan.com Ltd (ASX: KGN) and Michael Hill International Ltd (ASX: MHJ).
I think this was a very promising update. It’s already profitable, the Mastercard deal could be very useful and it’s expanding its distribution. If I had to buy a BNPL provider for my own portfolio, it’d be FlexiGroup (soon to be called humm).
But I still prefer other ASX growth shares more, like payment business Pushpay Holdings Ltd (ASX: PPH).
