REUTERS: Australian buy now, pay later (BNPL) firm Zip Co Ltd is looking to provide users a chance to trade in cryptocurrencies, co-founder Peter Gray said on Thursday, as established players in the sector test newer areas of business to power growth.
With the United States driving its fourth-quarter growth and the country set to soon become its biggest market by volumes, Zip said it would likely launch the new service there and in Australia in the next 12 months.
Gray said trading in crypto using Zip digital wallets was one of the most requested new product features from users, but did not give more details on how the trading would work.
The company is vying to close ranks with bigger rivals Afterpay and Klarna, which are expanding into more countries and plotting new offerings as the BNPL sector attracts deep-pocketed names like PayPal and reportedly Apple.
As competition intensifies, Afterpay had earlier this month said it would launch a banking app in October.
The rush of big players shows the popularity the sector has gained during the pandemic as young shoppers looked for easier access to credit.
“We know our younger generation of customers seek additional products and services that are relevant to them,” Gray told Reuters.
He said a broader range of products such as budgeting tools for Zip users, was likely to be launched first in Australia, given the market is mature and around 30per cent of adults have a BNPL account.
As Zip’s global expansion picks pace with deals for firms in Europe and Middle East, the company said its U.S. unit, Quadpay, will be rebranded as Zip to consolidate the brand under one name.
Shares of Zip, however, fell 7per cent, as its fourth quarter volumes and revenue more than doubled but missed some analysts’ expectations.
Group transaction volumes hit AUS$1.76 billion (US$1.29 billion) in the June quarter, missing estimates by UBS and RBC Capital Markets, even as volumes at its U.S. unit quadrupled.
(US$1 = 1.3600 Australian dollars)
(Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Arun Koyyur)