Openpay (OPY) -1.95%: BNPL names were mostly lower today. The UK overnight announced it would seek to regulate BNPL products under the FCA. The move means lenders would have to perform credit and affordability checks before accepting a loan, while also needing proper hardship procedures in place for struggling customers. The UK market is a few steps behind Australia and the US in terms of penetration, but today’s move is the strictest in terms of regulation of the industry.
Klarna & Afterpay are the two main players, however the UK expansion is key to valuing Openpay given it is the company’s main offshore target. They were quick to respond to the oversight saying they had already been in discussions with the FCA, believing they already have the systems and requirements in place to meet the new standard. We hold OPY in the soon to be released Emerging Companies portfolio, it screens cheap though is less established.
We are sellers of OPY closer to $3
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