The market may have tumbled lower this morning, but that hasn't stopped the FlexiGroup Limited (ASX: FXL) share price from charging higher.
At the time of writing the FlexiGroup share price is up 7.5% to $1.45.
Why is the FlexiGroup share price charging higher?
Investors have responded very positively to the release of an update on the performance of the company's Afterpay Touch Group Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) rival, humm.
According to the release, a number of new high-profile retail partners have joined the humm buy now, pay later (BNPL) platform.
These include City Fertility, IKEA, JB Hi-Fi Limited (ASX: JBH) New Zealand, Myer Holdings Ltd (ASX: MYR), National Dental Plan, National Hearing, Solomon's Carpets, and Strandbags.
What is humm?
FlexiGroup's humm platform is the result of the consolidation of its two legacy platforms – Certegy EziPay and OxiPay.
The company describes the platform as an "innovative and differentiated customer offer which enables shoppers to spend from $1 up to $30,000 completely interest free."
At the last count humm accounted for 17% of BNPL transaction volume in Australia (and 40% of receivables) with over 1 million customers shopping at more than 13,000 seller locations and e-commerce platforms. In New Zealand the company has over 160,000 BNPL customers who can shop at over 1,700 seller locations.
The company's CEO, Rebecca James, appeared to be delighted with the most recent additions to the platform.
She said: "We're delighted with the response we've received from our retailers and it's clear that there is strong demand for our differentiated proposition. These retailers have seen how the humm platform supports customers in financing their lifestyles when it comes to health, family, home, fashion and more. The range of merchants added reflects this appetite for more flexible Buy Now Pay Later solutions that can service a wider breadth of transactions and offer greater repayment terms to the retailers' customers. With humm, customers can handle the 'little things' worth up to $2,000, repaid over 2.5 or 5 months and the 'big things' worth over $2,000, repaid over 6-60 months, quickly and easily, from the same app – an Australian first."
Adding: "The addition of these leading brands across our target verticals reinforces the strength of humm's offering – bringing new growth opportunities to retailers and delivering a unique and compelling user experience direct to consumers."
Should you invest?
Although FlexiGroup is the original provider of buy now, pay later services in Australia, the poor execution of its Certegy EziPay and OxiPay platforms let its rivals push ahead.
But the consolidation of these brands has been a masterstroke and has left it well-positioned to compete with Afterpay and Zip Co. I believe today's announcement demonstrates how far the company has come and makes it well worth considering.
Though I do have concerns that increasing competition in the BNPL industry could lead to margin pressures in the medium term, so investors may want to keep an eye out for that.
