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Block (SQ) Boosts BNPL Efforts With Afterpay's Monthly Option

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Block’s (SQ - Free Report) Afterpay has unveiled a buy now pay later option (BNPL) - a monthly payment solution to deliver an enhanced payment experience to merchants and their customers.

Notably, the new solution allows customers to break the total cost of their purchased item into monthly payments over a six or 12-month period without any late fee.

The solution is applicable for purchases worth between $400 and $4,000.

The monthly payment option is currently available for online purchases at the U.S. merchant websites such as Bellacor.com, EyeBuyDirect, FWRD and Your Mechanic. More merchants are likely to be added soon.

The company intends to make the underlined option available for in-person purchases and to merchants outside the United States in 2023.

Block, Inc. Price and Consensus

 

Block, Inc. Price and Consensus

Block, Inc. price-consensus-chart | Block, Inc. Quote

Growing Initiatives

The latest move bodes well for Block’s growing efforts toward bolstering its presence in the booming BNPL market.

Apart from the introduction of the monthly payment solution, the company recently launched Square’s first integration with Afterpay in Canada, which was only available in the United States and Australia.

In addition, it recently unveiled Square’s integration with Clearpay (known as Afterpay outside of the U.K. and Europe) in the U.K.

Afterpay recently teamed up with Sephora, an omni-retailer of beauty products, in a bid to offer the BNPL service to the latter’s customers. Sephora shoppers in the United States enjoy the flexibility of payment in 4 installments for their purchases using the Afterpay app.

Block plans to introduce Afterpay’s BNPL service to Sephora shoppers in Canada later this year.

Afterpay partnered with trusted care retailer Rite Aid to offer the flexibility of paying for everyday items in four installments to the latter’s online customers.

Afterpay teamed up with Hypebeast to offer the flexibility of payment in four installments to shoppers on the latter’s global e-commerce platform — HBX.

With the expanding global footprints, strengthening offerings and winning partnerships, Block, which currently carries a Zacks Rank #3 (Hold), remains well-poised to capitalize on the growth prospects in the BNPL market.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

According to a Fortune Business Insights report, the global BNPL market is expected to hit $22.86 billion in 2022 and likely to reach $90.51 billion by 2029, witnessing a CAGR of 21.7% between 2022 and 2029.

We believe that Block’s growing prospects in the booming market will instill investor optimism in the stock.

Notably, Block has lost 61.7% on a year-to-date basis compared with the industry’s decline of 48%.

Competitive Scenario

The company’s robust BNPL efforts are expected to aid Block in strengthening its competitive position against players like PayPal (PYPL - Free Report) , Affirm (AFRM - Free Report) and VISA (V - Free Report) , which are making strong efforts to bolster their presence in the rapidly growing BNPL market.

More precisely, Block is likely to give cut-throat competition to PayPal, which is witnessing the solid adoption of its BNPL solution — Pay in 4. The company recently unveiled PayPal Pay Monthly, allowing customers to break the total costs of their purchased items into monthly payments over 6-24 months without any late fee. The solution is applicable for purchases worth between $199 and $10,000.

PayPal’s acquisition of Paidy, a Japan-based BNPL solution provider, remains noteworthy.

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, strengthened its presence in the Asia Pacific region.

Meanwhile, VISA provides a BNPL service called Visa Installments, including 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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