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Oz BNPL firm Openpay quits US

Oz BNPL firm Openpay quits US

Australian buy now, pay later firm Openpay has ended its US operations and laid off most of its staff in the country, according to Reuters.

The lender is the latest BNPL player to feel the consequences of rising interest rates and a wider economic downturn, leading it to stop extending loans in what it had recently described as its main growth market.

Openpay cited investment in an "Americanised" platform as the reason it reported widening losses in the first half of the year. It is now exiting after failing to secure an investor to back the US operation.

Earlier this year, it exited the UK market after a three-year push that failed to dent the market share of established competitor brands. The departure came after the firm was caught up in an FCA crackdown on unfair and unclear terms in BNPL contracts.

Having emerged as a major force over the last couple of years, the BNPL sector is facing up to the reality of rising interest rates.

Last week, it emerged that Klarna is closing in on a funding round that would see its valuation slashed from $45.6 billion last year to just $6.5 billion.

The Swedish firm has also cut 10% of its staff, while another lender, Sezzle, has axed 20% if its US workforce.

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