When it comes to innovation, one company in the market stands apart from the rest, and that’s Square (NYSE:SQ).
Square is the quintessence of innovation – the model company for leveraging innovative business expansions to drive huge revenue growth, year after year.
The company started out in 2009 by selling flexible and affordable payment card readers to merchants, so that they could accept non-cash payments.
Then, Square built out a software services ecosystem that provided payroll assistance and management tools to merchants and retailers.
Next, the company expanded into the e-commerce channel, developed bank-like services, created a consumer-facing cashless app called CashApp, jumped into the cryptocurrency world by allowing CashApp users to trade Bitcoin, and more.
The sum of these innovations has transformed Square from a tiny, little-known non-cash point-of-sale payment processor back in 2009, to an all-in-one fintech giant worth $120 BILLION today…
The results of this transformation are in the stock price, which is up more than 30X from its initial public offering (IPO) price in late 2015.
Now, the world’s most innovative company is at it again. This time, they are innovating via acquisition, and making a $29 BILLION bet on an entirely new, burgeoning industry that most folks probably haven’t even heard about yet… an industry that Square believes (and of which we agree) could be the next big thing in fintech.
The industry? Buy now, pay later – or BNPL, for short.
The BNPL market is simple. It’s a host of services that allow for folks to buy a product today, and pay for it through regularly scheduled installments in the future. Sound like a credit card? It is. Except BNPL services normally don’t charge interest, because BNPL service providers don’t make their money off those interest payments – rather, they make their money through a commission fee on the initial transaction.
In short, then, BNPL services are basically credit cards without interest.
Of course, there are catches. The max payment amount on a BNPL service is usually only a few thousand bucks, at most, whereas you can charge infinitely more to a credit card. At the same time, credit cards have huge rewards systems built into them, so consumers earn fiscal rewards for using their credit card. Such reward systems do not exist in BNPL services.
But consumers are apparently willing to look past these shortcomings, and are instead falling in love with the “no interest” aspect, as BNPL usage and popularity is soaring right now.
According to market research firm C+R Research, 51% of consumers used BNPL services in 2020, as the Covid-19 pandemic forced folks into online shopping channels, where BNPL services are most prevalent. Consumers subsequently discovered BNPL services, fell in love with their affordability and flexibility benefits, and have been using them wherever they can since.
And that’s the impressive thing about BNPL usage: It’s sticky. About 38% of BNPL users surveyed by C+R Research said that they expect BNPL services to eventually replace their credit cards.
In other words, BNPL services aren’t just a “Covid thing” – they’re the future of how you and I pay for goods and services.
Will they entirely replace credit cards? No. Of course not. But they will certainly become a very mainstream, very popular way to pay for things one day. If 38% of consumers today are saying that they will replace their credit cards with BNPL, then these services could very realistically comprise 40%, 50%, or more of total transaction volume by 2030.
And that’s why we’re so excited about the BNPL industry.
Because, according to a Worldpay report, BNPL transactions accounted for just 2.1% of e-commerce transactions worldwide in 2020.
That delta between where the industry is today (~2% penetration) and where it will be in 10 years (~50% penetration) implies a multi-hundred-billion-dollar economic opportunity for early investors.
Indeed, Bank of America sees the BNPL market growing 10X to 15X by 2025 to processing almost $1 trillion in transactions.
The upside here is enormous.
So, it’s no wonder Square is going “all-in,” and just agreed to acquire BNPL service provider Afterpay for an astounding $29 BILLION.
Over the next few years, Square is going to integrate Afterpay technology into all its payment processors, all its online portals, and all its CashApp features. That means tens of millions of new merchants and consumers will have access to BNPL services as a result of this acquisition – which, of course, will meaningfully accelerate the BNPL revolution.
Mark our words. We think Square’s acquisition of Afterpay will go down as the moment the BNPL revolution went mainstream.
That means now is the time to invest in BNPL stocks.
Which is why, just a few days ago, I highlighted a tiny BNPL stock in The Daily 10X Stock Report – my ultra-exclusive research advisory service dedicated to picking one explosive, hypergrowth stock pick, every single the day stock market is open, with the potential to soar 10X in value.
Yep. You heard that right. One, brand-new 10X potential stock pick every single day.
I started this service just over a year ago – and in that short time, I’ve already scored my readers nearly 100 triple-digit winners and 6 different stocks that have soared 10X or more in value.
I believe the tiny BNPL stock I just told subscribers about this week has a good chance of being our seventh 10X winner.
So… what’re you waiting for? Click here, and get the name of that potential 10X pick – and many more just like it – right now.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
By uncovering early investments in hypergrowth industries, Luke Lango puts you on the ground-floor of world-changing megatrends. It’s how his Daily 10X Report has averaged up to a ridiculous 100% return across all recommendations since launching last May. Click here to see how he does it.