Zip co-founder Peter Gray has announced faster growth in the massive US market, stating that Americans are a few years behind Australians, conscious of buying now, paying later ( BNPL) as an alternative to credit cards

Shares in Afterpay rival Zip rose 22 percent to $ 7 on Thursday, and market cap surged to around $ 4 billion by late afternoon after seeing rapid growth in transactions, customers and revenue in the December quarter

Analysts said the rapid expansion in the US is an outstanding result of the trade update US revenue and transactions were up more than 200 percent year over year

Amid a global race between BNPL operators to enroll consumers and retailers, Gray signaled that Zip could continue to grow strongly in the US after sales in that market also doubled every quarter

Mr Gray said the US market still has a long way to go in converting credit cards to BNPL as Americans were about three or four years behind Australia in terms of awareness of the fast-growing digital payment method. p>

“We are very optimistic to continue at similar levels,” Gray told the Sydney Morning Herald and The Age. “It really is a starting point to continue penetrating the US We are very focused on being successful in this market be “

Zip was also launched in the UK last month, and Mr Gray said it has a new market team that is looking for other opportunities, for example in Europe or Asia

Across the company, Zip revenue grew 88 percent year over year to $ 102 million The Australian business saw sales grow 43 percent to $ 52 million

Zip US sales rose 207 percent to $ 476 million, while the value of its US transactions rose 217 percent

The results are part of a boom in the BNPL sector where lenders offer installment loans to consumers and charge merchants or consumers a fee for the service

Milford Asset Management investment analyst Roland Houghton said the strong expansion in Australia shows growing popularity of the service domestically, while rapid growth in the US is also encouraging

“I think this shows that the market in America is so large and the penetration is so low that a number of companies can grow strongly at the same time,” he said

Shaun Ler, an analyst at Morningstar, said Zip seems to be gradually catching up with market leader Afterpay and also noted the rapid growth of its US division, “It’s a strong result and I think investors are very excited for that Prospects for this company, “said Ler

Royal Bank of Canada analyst Tim Piper said the December quarter was a strong seasonal period, but results showed Zip started the year with a growing consumer and retailer base, and so did US growth Highlight highlighted

One risk that has existed in the BNPL sector in recent years has been the prospect of tighter regulation, and Mr Gray said some form of regulation was in sight in the medium term as it would be unusual for a widespread credit product to be unregulated stay

“The medium term view is likely that there would be some form of appropriate regulation,” said Gray

Zip (ASX, z1p asx, Z1P

World News – AU – Zip Co optimistic for more US growth as stocks rise

Source: https://www.smh.com.au/business/banking-and-finance/afterpay-rival-zip-co-surges-on-rapid-revenue-and-transactions-growth-20210121-p56vry.html