Last month, Square (NYSE:SQ) made a huge $29 BILLION bet on the burgeoning “Buy Now, Pay Later” – or BNPL – industry by acquiring BNPL service provider AfterPay.
Quick refresher: BNPL services allow for folks to buy a product today and pay for it through regularly scheduled installments in the future. It’s basically a credit card, except BNPL services normally don’t charge interest within agreed upon timeframes, 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.
For the most part, then, BNPL services are basically credit cards without interest.
Sounds cool? It is. It’s actually much more than cool. It’s profound and revolutionary.
That’s why – immediately after Square announced its acquisition of AfterPay – we wrote to you saying that the BNPL market was the next big fintech revolution, that BNPL services could replace your credit card, that this was a trillion-dollar industry in the making, and that the next wave of fintech “super winners” would come from the BNPL industry.
Looks like Amazon (NASDAQ:AMZN) agrees.
Just last week, the e-commerce giant partnered with leading BNPL service provider Affirm (NASDAQ:AFRM) to allow customers to break up purchases of $50 or more into smaller installments. It’s the first partnership Amazon has ever made with any installment player of any kind.
It was a landmark deal, and in response to the groundbreaking news, Affirm’s stock soared about 50% – in a day.
So… let’s recap here…
Square believes in BNPL. Amazon does, too. Oh, and PayPal has its own BNPL service called “Pay in 4.”
Do you think all these major fintech companies are wrong?
They’re not. BNPL is the future.
Again, BNPL services are basically credit cards without interest. Yes, there are catches. You have a low “credit limit,” usually in the few-thousand-bucks range, and there aren’t any rewards systems built into BNPL services.
But what are those shortcomings relative to the “no interest” benefit of BNPL services? Nothing! And that’s why BNPL usage and popularity are soaring right now.
According to market research firm C+R Research, 51% of consumers used BNPL services in 2020. Sure, Covid-19 had something to do with that, as it forced consumers into online shopping channels, where BNPL services are most prevalent.
But here’s the impressive part: About 38% of those new BNPL users expect BNPL services to eventually replace their credit cards.
In other words, BNPL isn’t a “Covid thing” – it’s the next evolution of consumer payments. The credit card killer, if you will.
We’re in the first inning of this BNPL revolution.
According to a Worldpay report, BNPL transactions accounted for just 2.1% of e-commerce transactions worldwide in 2020. We think that number could easily rise to ~50% penetration by 2030. Therefore, you’re talking about an industry that could grow by nearly 25X over the next 10 years.
The upside here is enormous.
You can play this revolution by buying Square (SQ). They’re going to do some really cool things with AfterPay, by integrating BNPL capability into all of its merchant payment processors and its CashApp ecosystem.
Or you can be more direct and buy Affirm (AFRM). The Amazon partnership cements them as the BNPL leader.
But if you’re looking for the biggest upside play in the booming BNPL industry, I have another pick in mind for you.
It’s a tiny BNPL service provider with a compelling business model that we believe represents one of the best applications of BNPL technology in the world.
Yet, no one is talking about this company today. The stock trades for less than a $1. And the market cap is under $200 million.
In other words, the potential upside with this pick is huge!
Which is why, just a few days ago, I highlighted this 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.
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 six different stocks that have soared 10X or more in value.
I believe the tiny BNPL stock I just told subscribers about last month 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.