Zip Co Ltd, an Australian purchase now, pay later company, announced that it would boost costs for customers and merchants as it tries to withstand the impact of skyrocketing inflation and rising interest rates on its business.
This year, the company's stock has dropped about 90 percent as rising interest rates and lower consumer spending have increased the industry's funding costs, while tighter regulation has made credit conditions more difficult. more info
Zip stated that it was well positioned to mitigate the consequences of higher interest rates by strategies such as "consumer fee hikes, merchant repricing, and increased customer repayment velocity."
"We acknowledge that while we are not immune to market volatility, there remains significant opportunity for Zip and buy now, pay later products in a heightened inflationary environment," it said.
The corporation, which has yet to report an annual profit, has also been decreasing costs in order to earn a profit in fiscal 2024.
It expects to profit more than A$30 million ($20.8 million) from the efforts and said it would continue to assess capital allocation for its Rest of World (RoW) companies, which include Canada, the Czech Republic, and Mexico.
Zip's shares, which are on track for their worst yearly performance since their inception in 2009, closed at their lowest since April 2016 in a broadly weaker market, while Sezzle, which Zip plans to buy for $350 million, fell nearly 9 per cent.
Zip also expressed support for "simple, fit-for-purpose legislation" in response to recent statements concerning the prospective regulation of BNPL products in Australia.
It stated that as of March 31, it had A$303 million in cash and liquidity, which it projected to last until cash flow breakeven in 2024.
(Source:www.usnews.com)
This year, the company's stock has dropped about 90 percent as rising interest rates and lower consumer spending have increased the industry's funding costs, while tighter regulation has made credit conditions more difficult. more info
Zip stated that it was well positioned to mitigate the consequences of higher interest rates by strategies such as "consumer fee hikes, merchant repricing, and increased customer repayment velocity."
"We acknowledge that while we are not immune to market volatility, there remains significant opportunity for Zip and buy now, pay later products in a heightened inflationary environment," it said.
The corporation, which has yet to report an annual profit, has also been decreasing costs in order to earn a profit in fiscal 2024.
It expects to profit more than A$30 million ($20.8 million) from the efforts and said it would continue to assess capital allocation for its Rest of World (RoW) companies, which include Canada, the Czech Republic, and Mexico.
Zip's shares, which are on track for their worst yearly performance since their inception in 2009, closed at their lowest since April 2016 in a broadly weaker market, while Sezzle, which Zip plans to buy for $350 million, fell nearly 9 per cent.
Zip also expressed support for "simple, fit-for-purpose legislation" in response to recent statements concerning the prospective regulation of BNPL products in Australia.
It stated that as of March 31, it had A$303 million in cash and liquidity, which it projected to last until cash flow breakeven in 2024.
(Source:www.usnews.com)
