Openpay

Openpay is an Australian BNPL platform launched in 2016 offering flexible payment plans with deferments ranging between 2-24 months for transactions from AUD 50 to AUD 20,000 (approximately USD 36-USD 14,600). The platform focuses on the automotive, healthcare, home improvement, memberships, and education industries. In December 2019, Openpay was listed on the Australian Securities Exchange, raising AUD 50 million (approximately USD 35 million) in the process. This was roughly two years after it had to abruptly cancel its initial IPO plans and raised AUD 10 million (approximately USD 8 million) instead.

Openpay’s B2C solution offers equal weekly and bi-weekly installment plans at no interest, with longer terms typically offered for larger ticket purchases. Its proprietary risk management technology drives the platform’s credit decisions, and it integrates with leading e-commerce platforms such as Shopify, PrestaShop, Magento, and WooCommerce. Furthermore, Openpay has a B2B trade account management solution that is separate from its BNPL service. 

Openpay generates revenue through merchant fees, which represent a percentage of the transaction value, customer fees (including late fees), an initial establishment fee, and a recurring plan management fee. 

Initially available in Australia and New Zealand, Openpay expanded its operations to the UK in June 2019, followed by a US launch in December 2020 under the brand Opy. However, it withdrew from the UK BNPL market in March 2022 citing its inability to compete in the market. It also revealed that it will continue to offer longer-term repayment plans for dental procedures and car repairs in the UK through partnerships. 

Key customers and partnerships

It entered the veterinary market in the US via a partnership with ezyVet, which provides cloud-based software for veterinary professionals, and its plans are expected to be available on ezyVet platforms by early FY2022 in the US. It partnered with contactless payments firm Everyware in October 2021 to offer the first-ever Pay-by-Text BNPL solution, followed by a tie up with American Express in December 2021 .

Openpay secured a strategic partnership with the payments processor Worldpay and Cross River Bank. As a result, Openpay’s payment plans were integrated with Worldpay’s payment gateway as the merchant acquirer for Openpay in the US, while Cross River was expected to serve as Openpay’s lender for consumer financing loans to US customers, meaning it will fund and originate all loans on Openpay’s US platform. However, in July 2022, Openpay announced that it’s ceasing operations in the US market owing to economic headwinds stemming from rising interest rates and deteriorating consumer sentiment.

Funding and financials

In October 2021, Openpay closed a revolving warehouse facility of USD 271 million from Goldman Sachs and Atalaya Capital Management, to fund its planned expansion into the US. Openpay planned to use the facility on marketing and partnerships with payments processors and merchant aggregators, as it competes for US BNPL market share with rivals Afterpay and Zip Co’s Quadpay. Moreover, Openpay announced plans to raise AUD 20 million (approximately USD 14 million) to execute its growth strategy in Australia and New Zealand (ANZ) in May 2022 . 

In FY2021, Openpay reported a total transaction value (TTV) of AUD 339 million (approximately USD 256 million), growing 76% from AUD 193 million in (approximately USD 133 million) FY2020. Its revenue stood at AUD 26 million (approximately USD 19.7 million), reflecting YoY growth of 44%. Revenue was evenly split between customer and merchant fees. Furthermore, the platform’s arrears rate increased to 2.8% from 0.8% in FY2020 due to early stage losses noted in the UK region.  

The platform grew active merchants to around 3,800, increasing 75% from 2,160 in FY2020. Total active customers amounted to 541,000 in FY2021, reflecting YoY growth of 70% from 319,000 in FY2020. However, Openpay reported a loss of AUD 63 million (approximately 48 million) in FY2021 compared to AUD 36.5 million (approximately USD 25 million) in FY2020.