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If you’ve been wondering where the phrase BNPL has gone, it was revived on Wednesday as microcap fintech Ovanti (ASX:OVT) inked a reverse lay-buy deal with NYSE-listed company Shift4 Payments Inc.
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Under a three-year agreement – “subject to further renewals of at least one year per renewal” – Ovanti will launch its BNPL product to U.S. consumers using Shift4, marking another Australian company exporting BNPL to the States.
That has been a model of mixed success, as I discussed recently with HotCopper editor Isaac McIntyre on the HotCopper Wire podcast. U.S.-based BNPL entity Klarna hasn’t necessarily been having a gangbusters year.
(That said, it’s still gearing up for an IPO, and has also started referring to ‘BNPL’ as ‘Pay-in-4’ instead.)
At any rate, interest in Ovanti’s Wednesday disclosure isn’t irrational. The company reports Shift4 processes over US$260B worth of sales each year for over 200K businesses. Half of them will be platforming OVT’s BNPL software in North America, part of what OVT describes as a pivot to the U.S.
But perhaps most interesting is Ovanti seemingly intends to target high-risk customers. At least, that’s what this finance journo interprets from the following:
“Ovanti’s BNPL platform will assist Shift4’s network of merchants by using real-time cash flow and income data rather than traditional credit scores, expanding access to financing for U.S. consumers who may not qualify under conventional models utilised by most of the major incumbent BNPL companies operating in the USA market alongside Ovanti.”
That could very well prove to be a double-edged sword for Shift4, and perhaps Ovanti, which did not attribute a value to the agreement on Wednesday but referenced a renewed ability to draw down on debt warehouse facilities up to USD$100M.
Ovanti has 4.3B shares on issue.
OVT last traded at 1.2cps.
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