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What will happen to the BNPL if Visa/MasterCard join the club, page-22

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Mado

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15/03/21

15:52

Post #: 51777725
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Originally posted by StefanF: ↑

Visa and Mastercard are payment channels. They are not in the business to take on credit risk which is why they are just partnering with BNPL companies. They aren't direct competitors.

What would need to happen for V/MC to join the BNPL space?

There would have to be a strategic decision made by the board to enter the completely new world of credit risk management. They would then have to hire large and expensive teams including:

Quantitative credit risk modelling - to build the models to take on credit risk.
Model Validation - independent team that oversees the building of the model, do independent testing and give final approval for the use of the model.

The whole process is expensive and from the time the strategic decision is made to the final model validation you're looking at 2-3 years.

This is a huge risk to take. Much less so for fintechs that have built the models already and PayPal which already has teams and credit risk management experience.

Visa & Mastercard will NOT compete in this space.

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What an absurd post. Visa and MC are the biggest credit providers on the planet,and you claim they arer not in the business to take on credit risk

Z1P Price at posting: $8.51 Sentiment: Hold Disclosure: Held
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