Ahead of listing, chief executive Michael Eidel said he envisaged a world where instalment payments were not an addition to traditional credit products, but the standard payment offer.
“For me, buy now pay later will become the new normal – what credit cards have been for 50 to 80 years,” he said.
Mr Eidel took the helm of the business, which was co-founded by Yaniv Meydan and Richard Broome, in March of this year.
Openpay was not deterred by the collapsed float of payments company Latitude and completed its $50 million initial public offer at $1.60 to list at noon on Monday with a $150 million market cap.
“Our focus is on what we call the savvy, grown up consumer,” Mr Eidel said last week.
Openpay argues that by chasing 30-somethings with dentist bills to pay, it is collecting a lower-risk cohort of borrowers than its buy now pay later counterparts focused on a younger market.
Unlike Afterpay and Zip, the company has a close to 50-50 split between customers and merchants for its revenue generation.
Retailers are charged 1.75 per cent of the transactions for lower value items, but can pay a commission of as much as seven per cent on dentistry or renovations.
Customers don’t pay interest but they may have to pay a processing fee of around $2.50 if they borrow large amounts, plus late fees.
However, Openpay is dwarfed by Afterpay’s reach: while the market darling announced it had hit $1 billion in sales last month, Openpay processed just under $100 million in sales in 2019, up from $27 million in 2017.
The company’s costs have also ballooned over the past 12 months. It increased revenue to $11 million last year but is operating at a $14 million loss.
Co-founder Yaniv Meydan holds the largest stake in the company, owning close to 25 per cent of the business through the Meydan Group.
Investec holds 10.5 per cent.
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Emma is the small business reporter for The Age and Sydney Morning Herald based in Melbourne.