News: APT Afterpay Ltd Says U.S. Sale Drove A 35% Increase In New Active Customer To Platform On..., page-73

You're right we're talking about bad debts.

In the midst of the pandemic almost all people in the markets APT operate in were given a safety net. Job-keeper payments ect. Now the after effects of the pandemic haven't hit yet. It's just been given a 'band-aid' solution for now. Moreover the 'retail bubble' where people spent more than ever on buying items of their homes, without being able to spend on travel, holidays ect - will come to an end. It is already.

Now when a company doesn't do credit check, its customers could be good, bad or ugly. So it's futile to look at it now - because it's coming. More and more people who can't get credit cards will move to APT, so as the customer base expands the risk of credit defaulting customers increases exponentially.

On top of that it's getting waaaay more expensive for APT to accumulate customers - this was apparent in their last report. Interest rates rising will cause their already slim margins to waste away.