Measured in terms of the proportion of e-commerce payments made using a buy now pay later service, Australia leads the way at 8 per cent, according to new research.
BNPL company Sezzle cited the Worldpay 2020 Global Payment Report in its half-year financial report yesterday, showing that the global average for BNPL as a percentage of e-commerce payments is 1.6 per cent. The proportion in the United State is 1 per cent.
For those who see the glass half full, and that includes Sezzle’s chief executive Charlie Youakim, those figures point to a great opportunity as the US and other markets catch up with BNPL’s Australian e-commerce penetration.
Although Sezzle is listed on the ASX, its operations are in the US and Canada (since May). It is testing the Indian market and “exploring opportunities in Europe”.
Speaking at an investor presentation yesterday, Youakim said: “The US is early in this market.”
Sezzle reported that at June 30 it had 1.5 million active customers – up from 430,000 at the same time last year. It had 16,112 active merchants – up from 5048.
Underlying merchant sales during the six months were US$307.4 million – up from US$70.2 million in the previous corresponding period.
Income grew from US$3.6 million in the June half last year to US$17.9 million in the latest half. Operating expenses grew from US$6.3 million to US$18.3 million.
The company reported a loss of US$8.2 million, compared with a loss of US$4.7 million in the previous corresponding period.
Sezzle chief financial officer Karen Hartje’s presentation focused on the improvement in the company’s net transaction margin, which is the income earned on merchant sales, less processing costs, financing costs and losses.
In the six months to June last year, Sezzle’s net transaction margin was negative 0.3 per cent, on account of high costs and losses. In the latest half both costs and losses were down and the NTM was 1.7 per cent.
Hartje said this turnaround was a result of better underwriting and lower transaction costs. US stimulus measures helped reduce losses.
She said the company adopted a more conservative approach to underwriting when the pandemic started but since then it has gone back to normal.
The company has a number of new products it hopes will entice new users. Sezzle Up, which links to the customer’s bank account and allows the customer “to build credit”; Sezzle Anywhere, which allows customers to use retailer gift cards; and Sezzle Spend, a rewards program.