Afterpay VS Zip share price: Is the market over partnership announcements?

• Afterpay and Zip announce partnerships with electronics retailer JB Hi-Fi
• Both stocks finish out Wednesday's session higher
• You can trade BNPL stocks with IG now. Click here to create an account.

How much of a good thing is too much?

Zip (ticker: Z1P) – a popular Australian buy now pay later company – on Wednesday announced it had struck a partnership with electronics retailer JB Hi-Fi.

In what was a relatively short announcement, Zip said it would provide ‘a fully integrated payment solution’ to both JB Hi-Fi and The Good Guys.

Ultimately, this will allow customers to make use of Zip’s instalment payment solutions, both in-store and online, which includes both Zip Pay and Zip Money.

Emphasising the value of this strategic partnership, Zip’s co-founder and COO, Peter Grey, said:

'We are delighted to partner with the JB Hi-Fi Group, We look forward to providing customers with choice at checkout, empowering them to own the way they pay at JB Hi-Fi and The Good Guys.’

This follows on from an announcement made by Afterpay (ticker: APT) on March 30, which revealed the company had also struck a partnership with JB Hi-Fi – to have its BNPL services offered in-store and online.

The company said its payment solutions would be available to JB Hi-Fi Group customers in the next few weeks.

Commenting on this partnership, Afterpay’s EVP of Sales ANZ and Global Instore, Rachel Kelly, said:

‘Afterpay customers will be thrilled to be able to buy big ticket items such as electronics, whitegoods, appliances and home entertainment in a responsible manner, without incurring interest or fees.'

The BNPL Playbook

Partnership announcements have become part and parcel of the BNPL scene. While the market in some cases have reacted dramatically to them – when Zip for instance revealed it had partnered with Amazon its stock shot up 22% – in recent times the lustre of these types of announcements seems to have worn off.

The key issue seems to be the magnitude of their operational impact is often vague or impossible to quantify. Of course that’s not to say it’s not potentially a good thing to have your hot payments service available to more customers – only that it's difficult to measure the true economic impact.

Despite that, the Afterpay share price finished out the session modestly higher, up 0.47% at $101.50 per share. The Zip share price performed comparably well, gaining 0.41% to finish out the day at $7.38 per share.

The All Technology Index outpaced the gains of both APT and Z1P – rising 0.83% on Wednesday.