Australian buy now, pay later (BNPL) firm Openpay has revealed it will pull out of the UK due to its inability to keep up in the ‘saturated’ market.
According to an exclusive by Sifted, Openpay interim CEO Ed Bunting has said the company is leaving the market after three years, with its 31 UK employees being made redundant by September this year. The company will continue to offer longer-term repayment plans for dental procedures and car repairs in the UK through partnerships.
Openpay joins other FinTechs such as N26, Robinhood, Holvi and Lydia who have all pulled out of the UK FinTech market in recent years, with many firms finding it hard to compete with key market leaders such as Klarna, Clearpay and Laybuy, who don’t charge fees to use payment plans or on interest.
This is something Openpay was unable to do, with the company charging its US customers up to 9.99% APR on its flagship product, which was something it was unable to do in the UK.
Sifted noted that Openpay’s change in strategy is a sign of just how competitive the market has become in the UK – mostly due to the dominance of Klarna.
The publication added that Openpay has a long way to go when it comes to profitability, after it reported a net loss before tax of $42m in the first half of its current financial year, which was a loss increase of 65% on a year earlier.