The FlexiGroup Limited (ASX: FXL) share price has been a strong performer on Thursday.
In morning trade the financial services and buy now pay later company's shares are up 10% to $1.18.
Why is the FlexiGroup share price surging higher?
Ahead of its annual general meeting this morning, FlexiGroup announced a partnership with payments giant Mastercard to expand the application and distribution of its bundll product.
Bundll is the world's first buy now pay anywhere platform built by humm.
The bundll product, which is already live in Australia, allows customers to buy now pay later everywhere Mastercard is accepted and bundle their purchases into easy to manage instalments with inbuilt budgeting services.
According to the release, under the agreement, Mastercard will work with its partners to drive adoption and will support the development of the open-loop, work anywhere, pilot. Management notes that the platform is able to support different integration and commercial models to achieve scale in different markets.
The agreement is for five years and is expected to deliver a sustainable growth path for its humm business and expand the services that schemes can provide to customers.
FlexiGroup's CEO, Rebecca James, commented: "The bundll platform is unique as it offers a turnkey but flexible solution to banks and other card issuers around the world. You don't need to sign up merchants or integrate into legacy bank systems, and it will work in any regulatory environment."
"Bundll's proprietary affiliate programme also creates revenue sources globally, and creates a curated and unique shopping experience that is based on customer preference, not which retailer is paying for the click. Discussions are already well progressed with a number of banks under the strategic agreement," she added.
Mastercard Australasia's Division President, Richard Wormald, spoke positively about the agreement with FlexiGroup.
He said: "While there are lots of BNPL platforms around the world, this latest development for bundll is differentiated in the way it is able to partner with existing banking systems and provide BNPL technology and products without needing to sign up local retailers, while still generating a sustainable revenue stream. With the growth of BNPL, Mastercard understands that many issuers around the world are looking to solve for this increasing consumer preference."
Trading update.
FlexiGroup took this opportunity to provide the market with an update on its performance so far in FY 2021.
It revealed that its portfolio continues to perform strongly with a downward trend in the 30+ days arrears performance for all segments during the first quarter. This was the result of a prudent approach to credit risk and approvals.
In light of this improved credit performance and cost management, the company expects its first half cash net profit after tax to be ahead of the $34.5 million it achieved in the prior corresponding period.
