Ann: August Business Update, page-6

Thanks CG

Re fees I think it's starting to be clear that for a bnpl business model to work there needs to be good balance between fees from merchants and fees from customers. Sezzle was free for years and still is free in basic form. I think they were smart to introduce premium sub levels rather than just monthly account fees, or payment fees, like some bnpl charge.

It's now what you could call a freemium model, kinda like Spotify, Zoom etc. Use the service for free, but pay to get the good stuff. Maybe something about knowing you're paying for a "Premium" service makes it less of an issue for consumers to justify, than paying an equivalent "monthly account fee" or "payment fee".

I'd say any subscribers are also less likely to let their account fall into arrears too, given they are kinda invested into the product and don't wanna waste their sub fee. Would love to see if there's a difference between bad debt provisions of subscribers vs non-subscribers.

Re Premium merchants, you're surely right some Premium merchants would still be integrated/partnered, hence increase in margin?