Block
SQ
has been consistently working toward expanding its customer base in the booming buy now, pay later (BNPL) market.
Recently, the company’s Afterpay teamed up with Sephora, an omni retailer for beauty products, in a bid to offer the BNPL service to the latter’s customers.
Sephora shoppers in the United States will get the flexibility of payment in 4 installments for their purchases using the Afterpay app.
The underlined partnership will make several Sephora exclusive products and other popular brands accessible to many customers, which, in turn, is expected to boost the adoption rate of the Afterpay app.
This, in turn, will get reflected in Block’s top-line growth in the near term.
Block’s Growing Initiatives
Apart from the latest move, Block recently launched its first integration with Afterpay. The company provided Afterpay’s BNPL capability to all sellers, using Square Online for e-commerce in the United States and Australia.
The company is planning to introduce Afterpay’s BNPL facility to Sephora shoppers in Canada later this year.
With BNPL initiatives, Block aims to cater to the increasing demand for BNPL services and capitalize on the growth prospects in the booming BNPL market.
According to a report by Research and Markets, the global BNPL market is expected to hit $20.4 billion by 2028, witnessing a CAGR of 22.4% between 2021 and 2028.
Intensifying Competition
However, Block, which currently carries a Zacks Rank #5 (Strong Sell) and has lost 60.1% on a year-to-date basis, faces stiff competition from players like
PayPal
PYPL
,
Affirm
AFRM
and
VISA
V
, which are also making strong efforts to bolster their presence in the rapidly growing BNPL market.
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the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
PayPal is witnessing the solid adoption of its BNPL solution — Pay in 4. Further, it recently unveiled PayPal Pay Monthly, which allows customers to break the total costs of their purchased items into monthly payments over 6-24 months without any late fee.
PayPal’s acquisition of Paidy, a Japan-based BNPL solution provider, remains noteworthy.
Meanwhile, Affirm is riding on its strategic partnerships. Its collaboration with Amazon to provide installment payment services to shoppers on the latter’s platform remains noteworthy. Affirm’s partnership with Shopify is another positive.
Affirm, with its partnership with Peloton, made its foray into Australia, which, in turn, aided its presence in the Asia Pacific region.
Then again, VISA offers a BNPL service called Visa Installments, which includes three installment models — Pre-Purchase, During Purchase and Post-Purchase — to help customers with flexible payments.
VISA offers its BNPL solution in countries like the United States, Canada, Russia, Australia and Malaysia.
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