Openpay makes US debut, with first steps towards $280b healthcare market

OpenPay OpyPay US Launch

Aussie buy now, pay later (BNPL) service, Openpay, has announced it has accepted its first live transactions through its recently established US arm, OpyPay.

Getting its first foot into the US’s massive healthcare market, OpyPay has linked up with cloud-based veterinary platform ezyVet, enabling customers in more than 1,200 veterinary hospitals and clinics across the US access to the BNPL’s “customised” payment instalment services.

The company in a statement said it has conducted a “controlled roll-out” with the first live OpyPay-accessible ezyVet locations in California, Michigan, Virginia, and Ohio. The US-specialty veterinary market, the BNPL notes, “has high transaction values for procedures such as MRIs, CT scans, and reconstructive surgery”.

The veterinary market in the US is no small fry, with Americans spending close to US$30 (A$39.9 billion) on veterinary care and veterinary product sales, according to the American Pet Products Association.

The “differentiated payments solution” is the first of its kind in the US market, Openpay said, with the service specifically designed for big-ticket purchases in healthcare, veterinary, dental, auto repair, education, home improvement as well as retail.

“Tailored to the US market with a US-localised solution, regulatory permission, marquee funding, and customised risk models, OpyPay is now live and transacting, with controlled distribution commencing in the healthcare sector (including veterinary),” Openpay said in a statement.

The now eight-year-old, Melbourne-based BNPL has been eyeing a US expansion for a number of years, establishing its dedicated US arm in December 2020 to support its expansion. This also follows the company’s UK launch in 2019.

The US, it said, “is a massive market with strong demand for flexible instalment plans to enable better budgeting, smarter payments, and increased merchant revenues.”

Speaking with FST Media in July this year, Openpay chief executive Michael Eidel said the $280 billion US healthcare market was a significant focus for the BNPL as it pursues its global expansion.

“This is more than the whole retail sector plus other verticals market in Australia,” he said.

“We’re focusing from the outset on these big businesses in healthcare and automotive, those three-digit billion US dollar opportunities with no big [BNPL] solution there yet.”

Eidel at the time said customers were “screaming out” for alternatives to credit cards, a fact that had “very strongly influenced [Openpay’s] decision to move into the US”.

“The US market, from a merchant and from a consumer perspective, is really ripe for disruption, he said.

“The decision to enter the US [has] really followed strong demand in the largest consumer market in the world, and particularly overcoming, from a consumer perspective, all the traps of credit cards, which people don’t like as well.”

Latest data from the US Federal Reserve reveals, on average, each American owes around US$3,000 ($3,991 AUD) to credit card companies, with credit card debt hitting a record high of US$930 billion ($1.23 trillion AUD) in the final quarter of 2019.

He added that while the US market was seeing a preponderance of pay-in-four BNPL players, including Aussie giant Afterpay, for retail purchases, the “longer, larger and more customised” offering provided by Openpay was currently not present in the market.

US consumer demand for instalments continues to rise considerably, with transaction volumes expected to exceed US$100 billion in 2021.

Upwards of 111 million consumers in the US, around 43 per cent of the country’s total consumer base, said they would prefer to make high-value purchases using a BNPL service rather than using personal loans or credit cards, a recent survey by and AWS study revealed.

Openpay and Opypay both offer their customers customisable plans with durations of 2–24 months and values of up to $20,000.

The company also has a B2B offering, OpyPro, a SaaS-based platform enabling businesses to manage trade accounts end-to-end, including applications, credit checks, approvals, and account management.

Last year, the company secured a deal with retail giant Woolworths to deploy its SaaS platform.