It certainly has been a disappointing day of trade for the Afterpay Touch Group Ltd (ASX: APT) share price.
The payments company's shares fell as much as 6.5% to $26.56 during morning trade. At the time of writing they are down just under 6%.
Why is the Afterpay Touch share price deep in the red today?
The Australian share market has come under pressure today after a top U.S. trade official suggested that higher tariffs on Chinese goods are coming this week. This has sparked concerns that a trade war could ensue and derail global economic growth.
One of the worst performing areas of the market has been the tech sector. As well as Afterpay Touch, the shares of Megaport Ltd (ASX: MP1) and WiseTech Global Ltd (ASX: WTC) have fallen heavily.
This weakness means the S&P/ASX 200 Info Tech index is currently trading 2% lower this afternoon.
What else has happened?
In addition to this, news that one of its rivals has signed a number of major retailers to its platform could be weighing on Afterpay Touch and Zip Co Ltd (ASX: Z1P) shares today.
This morning FlexiGroup Limited (ASX: FXL) provided an update on the performance of its rival buy now, pay later (BNPL) platform.
According to the release, FlexiGroup has signed several major retailers to its humm platform including furniture giant IKEA and Myer Holdings Ltd (ASX: MYR).
What is humm?
Although it may not be as widely known as Afterpay, humm has been growing at an impressive rate.
Today's update revealed that humm currently accounts for approximately 17% of BNPL transaction volume in Australia (and 40% of receivables), with over 1 million customers shopping at more than 13,000 seller locations and e-commerce platforms.
In New Zealand the company has over 160,000 BNPL customers who can shop at over 1,700 seller locations.
The company describes the platform as an "innovative and differentiated customer offer which enables shoppers to spend from $1 up to $30,000 completely interest free."
Unsurprisingly, this positive update has sent the FlexiGroup share price hurtling higher today. In afternoon trade it is up a massive 23%.
What now?
I've been impressed at the growth of humm and the recent additions to its platform. However, I wouldn't be overly concerned for Afterpay at this point.
This is because I feel their target markets are different and Afterpay also has its global expansion underpinning its growth.
Though, with competition heating up in the market, I would suggest investors keep a close eye on margins. With so much choice now for retailers in the BNPL market, it could potentially lead to platform providers having to undercut each other.
