Latitude (ASX:LFS) boss warns many ASX BNPL companies “will go out of business”

Is the future dire for Australia’s listed BNPL companies?
The post Latitude (ASX:LFS) boss warns many ASX BNPL companies “will go out of business” appeared first on The Motley Fool Australia. –

The CEO of buy now, pay later (BNPL) provider Latitude Group Holdings Ltd (ASX: LFS), Ahmed Fahour has told the media that many of his company’s ASX peers won’t survive through to 2024.

His comments, published yesterday afternoon, preceded the sector’s major downturn on Friday.

At the time of writing, the Latitude share price has seemingly dodged the worst of the carnage. It has fallen just 0.79% to trade at $1.89.

On the other end of the cacophony, the Afterpay Ltd (ASX: APT) share price has tumbled by 7.32% today. Its ASX peer Zip Co Ltd (ASX: Z1P) has fallen 5.6%. Sezzle Inc‘s (ASX: SZL) stock is also in the red, having slid 9.29%.

For context, the S&P/ASX 200 Index (ASX: XJO) is up 0.28% right now.

Let’s take a closer look at Fahour’s prediction for the ASX BNPL sector.

Will the ASX BNPL sector survive?

According to Latitude’s boss, the company will soon be one of only a few ASX-listed BNPL providers, with many going defunct in the near term.

Right now, 15 companies listed on the ASX are involved in the BNPL industry. That’s not including the likes of banking heavyweight Commonwealth Bank of Australia (ASX: CBA) and its StepPay offering.

Fahour told The Australian that Latitude will be among the survivors due to its 30 years of experience as a payment services provider.

The publication quoted him as saying:

[I]n the next 12-18 months, a lot of [ASX BNPL companies] will go out of business because the market won’t keep funding their losses.

The comments come days after BNPL industry expert Grant Halverson said the sector’s participants might be hard-pressed for capital in 2022.

Halverson noted a race to expand into the United States might see BNPL providers taking on more bad debts. This could hinder their ability to access finance facilities, he said.

Latitude’s offering is different to that of many BNPL companies. Its LatitudePay allows customers to pay in 10 instalments, rather than the industry norm of 4. It also offers LatitudePay+ for purchases of up to $5,000.

In addition to Fahour’s media appearance, Latitude’s latest international expansion may be buoying its share price, too.

Today, Latitude announced its move into Singapore in partnership with Harvey Norman Holdings Limited (ASX: HVN).

Its BNPL service will go live in 3 of Harvey Norman’s 12 Singapore stores this month.

The company is also moving into “bigger ticket BNPL” next year to differentiate itself from the broader Asian BNPL market.

Fahour commented on the company’s entry into Asia, saying:

Singapore is a major Asian commercial hub and a logical entry market for Latitude, boasting a vibrant retail sector with sophisticated consumers who are quick to adapt to digital innovation.

The post Latitude (ASX:LFS) boss warns many ASX BNPL companies “will go out of business” appeared first on The Motley Fool Australia.

Should you invest $1,000 in Latitude right now?

Before you consider Latitude , you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Latitude wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Why Afterpay, Corporate Travel, Dubber, and EML shares are falling

Here are the 3 most heavily traded ASX 200 shares this Friday

BNPL whacked! Why the Afterpay (ASX:APT) share price is down 7% to a new 52-week low today

ASX 200 (ASX:XJO) midday update: BNPL shares sold off, Corporate Travel returns

Zip (ASX:Z1P) share price dives 8% amid US concerns and Sezzle merger rumbles

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended AFTERPAY T FPO and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended AFTERPAY T FPO and Harvey Norman Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!