The Afterpay share price has continued to grow despite the entrance of payments giants like PayPal
The post Afterpay (ASX:APT) share price up 4% in today’s trading appeared first on Motley Fool Australia. –
The Afterpay Ltd (ASX: APT) share price continues to climb today, up 4.44% to $104.96 at the time of writing. This is despite differing views on the buy now, pay later (BNPL) leader from two major banks over the past week, and comes after a 3.9% rise across last week.
Why the disagreement over Afterpay?
Westpac Banking Corp (ASX: WBC) CEO Peter King has defended the decision to provide Afterpay with access to the Westpac’s deposit and transaction accounts. Some analysts had disagreed with the move, believing the bank would lose its relationship with younger customers. But Mr King told shareholders at the Westpac AGM recently:
When we look at banking and how it is provided, we think it is fundamentally changing. Other banks are seeking to provide infrastructure to fintechs and this is a market Westpac wants to be in.
Westpac’s banking as a service platform will allow Afterpay to provide branded saving and transaction accounts. It will then be able to link these to customers’ existing Afterpay accounts. This provides Afterpay’s customers with an alternative to traditional banking, and gives Afterpay a scalable platform to expand globally. When this was announced the Afterpay share price spiked 7%.
However, Australia and New Zealand Banking GrpLtd (ASX: ANZ) has a different view. In an interview with Ticky Fullerton of Sky News, outgoing chairman David Gonski declared his skepticism of the BNPL business. ANZ CEO Mr Shayne Elliot went further, saying that Afterpay’s 3.5 million customers were generally not high savers motivated to buy their own homes, and therefore were not a good fit with the bank.
Forces driving the Afterpay share price
Despite these differing viewpoints, Afterpay continues to display strong growth metrics in every quarterly update. The recent first quarter FY21 update saw sales grow by 9% than the record underlying sales of Q4FY20. Moreover, the company’s active users has increased to 11.2 million, with the US reaching over 6.5 million.
Furthermore, 45% of like for like sales growth is driven by millennials. Gen X and Gen Z then form 25% and 24% respectively. Lastly, the company’s number of active merchants has increased to 63.8 k. An increase of 70% year on year.
The Afterpay share price has continued to grow despite the entrance of payments giants like Paypal Holdings Inc (NASDAQ: PYPL), or the views of senior financial players. The company continues to sign strategic alliances like the one with Westpac, while continuing to report solid results quarter on quarter.
Man who said buy Kogan shares at $3.63 says buy these 3 ASX stocks now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.
*Returns as of 6/8/2020
- Why the ANZ (ASX:ANZ) share price is underperforming on Monday
- Why the CBA (ASX:CBA) share price and these ASX stocks could get a $100bn boost
- ASX 200 jumps 1.7%: REA Group surges to record high, bank shares push higher
- Is the NAB (ASX:NAB) share price a bargain buy?
- ASX 200 Weekly Wrap: US election special
Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.