New BNPL enters ASX: How it promises to be different

There's another buy now, pay later provider on the market. Here's how it's different from Afterpay, straight from the co-founder's mouth.

| More on:
outperforming asx share price represented by row of white eggs with cartoon sad faces with one gold egg with happy face and crown

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Yet another buy now, pay later provider is listing on the ASX this week – but the company promises it's different to the rest.

Payright Limited (ASX: PYR) will start trading 11am AEDT on Wednesday after selling out its initial public offering (IPO) at $1.20 per share. The business will float with a market capitalisation of about $107 million.

The fintech will make it on to the bourse just before a quiet time over Christmas.

The Motley Fool spoke to co-founder and executive officer Myles Redward, who said the stock market was currently welcoming of new entrants.

"There's a lot of positive sentiment, particularly for our sector buy now, pay later," he said.

"It really was a case of trying to capitalise on that sentiment. Take advantage of the stock prices we're seeing more broadly."

Who can blame him. 

Afterpay Ltd (ASX: APT) shares are up 270% so far this year, and more than 1,335% since the March COVID-19 crash. Zip Co Ltd (ASX: Z1P) is up 48% year-to-date and more than 340% since its March trough.

How Payright is different to other BNPL

According to Redward, his business' main moat is that it targets a different consumer compared to most other BNPL providers.

"If you look at most of the micro-ticket buy now, pay later providers, we're talking sub-$1,000. Typically have average transaction sizes ranging from $150 to $500," he said.

"For us, our average transaction size is about $3,000."

So rather than clothing or small appliances, Payright users are paying for home renovations, health and beauty, or even higher education fees.

In fact, education contributes 34.1% of the gross merchant value that runs through the Payright system – the highest of any sector.

"Being a higher price point, it lends itself to a wider range of industry types, more diversified."

To mitigate the risk of lending out bigger amounts of money, Payright does have to be more discriminating about the end users it lends to.

"We do put our applicants through a more robust credit assessment process," Redward told The Motley Fool.

"So we do credit checks through Equifax Inc (NYSE: EFX), we consider a range of stability and capacity type measures and inputs… We ID-verify to safe harbour standards."

Payright's post-IPO plans

The IPO was set to raise $10 million or up to $20 million if it was oversubscribed.

Payright ended up landing $18.5 million. Combined with a pre-IPO capital raising round a few weeks ago, it now has $25 million to play with.

The money will be spent on sales and marketing, product development and technology – all in the name of growth, according to Redward.

"The reason we're doing the IPO is to really accelerate and turbo-charge that growth over and above what we've been able to achieve."

Revenue did rise close to 190% for the 2020 financial year compared to 2019, but it was coming off a low base. The business made a $8 million net loss off a turnover of $9.85 million for the year ending 30 June.

Australia remains the priority market, although its nascent New Zealand operations have just reopened after pausing during the first COVID-19 outbreak.

Should you invest $1,000 in Biotron Limited right now?

Before you buy Biotron Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Biotron Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Tony Yoo owns shares of AFTERPAY T FPO. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Person pretends to types on laptop drawn in sand.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors had a rough start to the week today.

Read more »

Happy man working on his laptop.
Broker Notes

Leading brokers name 3 ASX shares to buy today

Here's why brokers believe that now could be the time to snap up these shares.

Read more »

Two funeral workers with a laptop surrounded by cofins.
Broker Notes

Macquarie just forecast this ASX 300 dividend share could surge 37%. Here's why

Atop its passive income payouts, Macquarie expects this ASX dividend stock could leap 37% in a year.

Read more »

A person in a gorilla suit leaps really high holding a banana, nearly doing the splits.
Share Gainers

Up 1,238% in a year, why is this ASX gold stock surging again on Monday?

The ASX gold stock is now well into ten-bagger range and still rising fast today.

Read more »

A happy investor sits at his desk in front of his laptop and does the mexican wave with his arms to celebrate the returns from his ASX dividend shares
Share Gainers

Why EOS, Gorilla Gold, Lendlease, and OFX shares are charging higher today

These shares are starting the week on a positive note. But why?

Read more »

A young male investor wearing a white business shirt screams in frustration with his hands grasping his hair after ASX 200 shares fell rapidly today and appear to be heading into a stock market crash
Share Fallers

Why Appen, DroneShield, Gentrack, and New Hope shares are dropping today

These shares are starting the week in the red. But why?

Read more »

An unhappy man in a suit sits at his desk with his arms crossed staring at his laptop screen as the PointsBet share price falls
Materials Shares

Does Macquarie rate James Hardie shares a buy, hold or sell?

The company is set to report FY25 earnings this week.

Read more »

A man looking at his laptop and thinking.
Industrials Shares

Which ASX 200 industrials stock does Macquarie expect to sink 40% over the next 12 months?

Can this name build it's way out of such negative sentiment?

Read more »