Zip, Afterpay shares: Why are they rising?

• Zip (ASX: Z1P) share price reversed recent losses on Wednesday (22 September)
• Australia’s second largest buy now pay later (BNPL) company has acquired a small shareholding in Indian BNPL leader ZestMoney
• Meanwhile, rival Afterpay (ASX: APT) saw its shares increase nearly 3% after the launch of a new ‘pay-in-4’ feature for its money app
• Keen to take advantage of Zip and Afterpay’s rising share prices? Open an account with us to take a long position on both stocks today.

Zip stock price analysis

Zip shares jumped up as much as 5.3% on Wednesday, after announcing that it has agreed to make a strategic investment in ZestMoney, a leading Indian BNPL operator.

Zip will acquire a minority shareholding in ZestMoney by investing US$50 million to subscribe for Series C Preference Shares.

Zip has also negotiated terms to increase it’s shareholding over time, with specific reserved matters requiring Zip approval and a board seat as part of the investment.

Founded in 2015, ZestMoney is one of the largest and fastest growing BNPL platforms in India with 11 million registered users, over 10,000 online merchants and a point of presence in over 75,000 physical stores.

‘With deep partnerships with online and offline merchants and lending partners, ZestMoney is poised to accelerate growth as the market develops. We have been incredibly impressed with the founders and leadership team and look forward to the next stage of the ZestMoney journey,’ said Zip Co-founder and Chief Executive Officer Larry Diamond.

Despite the bullishness of late, Zip shares are down by some 9% in the last one month.

Afterpay stock price analysis

Shares of Afterpay, the largest BNPL player on the ASX, have climbed nearly 3% since it announced a new feature via one of its offerings.

The company shared that its money and lifestyle app, called Money by Afterpay (Money), has launched Afterpay Retro, a function that allows customers to retrospectively create a pay-in-4 from any eligible Money debit transaction.

The self-proclaimed ‘world-first’ feature can be used by customers for up to A$200 of their Afterpay overall available-to-spend amount - from any eligible retailer regardless of whether they usually accept Afterpay.

For example, customers with an Afterpay spending limit of A$1,000 can use up to A$200 for Retro purchases and the remaining A$800 for any other BNPL purchases if they choose to do so.

As part of the Money by Afterpay offering, all Retro purchases will follow Afterpay’s No Payment Up Front format, meaning the first payment is due two weeks after the purchase date.

The use of the feature is only available for purchases made with the Money debit card, requires customers to be in good standing and applies to only eligible transactions that were made within the last 72 hours.

Afterpay shares are down by 5% in the last one month, but up by nearly 18% in the last six months.

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