We wrote about buy now pay later services couple months ago and it appears to be one of the most popular post in our blog. Now Australian consumers and merchants have one more solution in addition to ZipPay and Afterpay – Openpay, so we decided to provide a brief outlook of this new option.
According an article in Anthill Online Openpay is “a new FinTech born out of in-store, representing the consolidation of Evoke AutoPay, Jam Payments and other white label solutions, with the technology evolved over four years”. The company is targeting IPO next year with a plan to raise $8-10M.
Openpay for consumers
Openpay promises instant, paperless loans through a special app for consumers. Below is the official video that shows how it works.
The main points of difference from existing providers (zipPay and Afterpay) are:
- Bigger purchase limit (up to $10,000)
- Longer finance term (up to 12 months), probably more a difference from Afterpay
While the credit provided to consumers are claimed to be interest free, it’s there are some costs for customers:
- Processing fee ($2.50 to $3.95)
- Open plan establishment fee ($60)
- Late payment, redraws and administrative fees
- Also, in the case of early payment a consumer still has to pay processing fees for all planned instalments
The terms for consumer varies a bit from merchant to merchant.
Openpay promises both in-store and online payments, but at the moment we couldn’t find any reference to online stores accepting Openpay. There are several dozens of brick&mortar stores listed on Openpay website including House, BMW, Toyota and Volkswagen service stations and Anaconda.
Main merchant benefits claimed are:
- Increase of average transaction value
- Transfer of risk (Openpay is responsible for payment collection, merchants get money next day)
- Benchmarking data and analytics about consumers
It isn’t clear yet how much the service cost to merchants and when online solution will be available.