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SoFi partners with Mastercard for BNPL foray

One insider is scooping up SOFI shares in a display of confidence to the market.

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It has been tough sledding for fintech stocks this year. The broader sector has been swept up in a tide of selling that has only increased in magnitude and velocity.

One fintech, SoFi Technologies, has decided that now is the perfect time to jump into the buy now pay later (BNPL) fray and inch closer to its financial 'Super App' aspirations.

SoFi has unveiled Pay in 4, its version of the popular electronic instalment agreement that has caught on like wildfire. It is available to users spending with SoFi Checking and Savings and is being rolled out to select users in the coming weeks. By jumping into the BNPL fray, SoFi is pitting itself against Block/Afterpay, Klarna,Affirm, and others.

In a coup for the fintech, SoFi has partnered with Mastercard for its BNPL payments initiative, meaning Pay in 4 can be used anywhere the card giant is accepted across the US. SoFi’s version of BNPL lets users split purchases whose amounts range from $50-$500 into four payments, with zero interest, as the maiden product of the Mastercard Installments program.

It’s designed to give users greater flexibility with their money, especially when it comes to big-ticket items. Consumers receive a digital Mastercard card for one-time use, the first payment for which is due at the time of purchase. Payments are tied to the user’s SoFi account, and the balance is paid in instalments every two weeks. 

"SoFi is already a diversified provider of digital financial services. BNPL product adds to the breadth of SoFi’s products and will help SoFi strengthen user engagement and acquisition," Eugene Simuni, managing director at equity research firm MoffettNathanson, told AltFi.

"That said, its financial contribution is unlikely to be material in the near term. More broadly, SoFi’s move to offer BNPL is another example of what we view as a trend for BNPL services to become widely available and, as a result, more commoditized. Last week there was news that Walmart-backed startup One is also planning to offer BNPL. We view this trend as a net negative for BNPL specialists like Affirm.

SoFi is playing offence at a time when its stock price has been swept up in the fintech sell-off tide, with shares trading near their all-time low of $4.24. Meanwhile, SoFi CEO Anthony Noto is apparently scooping up shares of the beleaguered stock, a flex of his muscle and a display of confidence for 2023.

According to a recent filing with the US Securities and Exchange Commission, Noto, who is at the helm of the fintech founded by Mike Cagney, has been doing his share of insider buying. In a trio of transactions in December, the SoFi boss scooped up more than $5m worth of SoFi shares, sending bullish signals to investors. Noto purchased 1.13m SOFI shares in the range of $4.29-$4.58 per share. The last time he added to his SOFI position was in June 2022.

The stock got a boost on the heels of Noto's buying spree, which sent shares higher by 6 per cent on 14 December before some profit-taking on 15 December.

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