Bad debts - why so high?, page-57

in the cold light of day BNPL offers no advantages over the payment method it seems to replace or Credit Cards and meets all the criteria of a "fad".

You can see that in the slowing customer growth in ANZ being only 3 percent as the Fad starts to lose momentum and wane.

The illusion cannot be maintained without strong customer additions to offset customer churn with those falling off the system.

The illusion can be extended by entering new territories and demonstrating growth from a low base but eventually each territory repeats the performance of the home territory and the fad begins to wane.

You are seeing this now with slowing customer acquisition in the USA.

All Covid did was prolong the fad beyond normal expected expiry dates.

The BNPL companies are now like salmon swimming upstream having to spend more and more marketing dollars to maintain customer acquisition but resulting in bigger losses on the bottom line.

They introduced pay anywhere to maintain the illusion of revenue growth and that is representing a bigger percentage of transaction volume but due to the low income from a share of interchange fees every transaction is loss making.

The platform/convenience fees will be outlawed or scrapped accelerating the bottom line losses