I've seen signs that expenses over the past year may have risen - interest and data costs, as well as marketing spend, wages and salaries, but we'll need to wait until August to see the results.
The US, AUS and UK governments and others have collaborated to bring BNPL under consumer credit legislation, which will cause providers to have to prove that the credit they are extending is 'not unsuitable' which means they will have to make reasonable enquiries about the applicant's capacity to repay - gathering up pay details, other loans, household and other expenses. This will have the result of making each account expensive to open as well as stifling growth and the worst part is leaving providers open to penalties if they digress, as consumer agencies will be posturing to prove. They are also committed to putting a ceiling on late fees and monthly account keeping fees in lieu of interest - all the stuff that BNPL businesses need to survive and are criticised for being too high.
In Australia legislation is with the Parliament, giving the RBA power to regulate payments among fintechs, which it currently does not have. The RBA has said that it will outlaw the BNPL practice of forcing merchants to absorb the high cost to them of BNPL and instead give them power to pass the cost on to the consumer, as is the case with other forms of payments. The average cost to a merchant for credit cards is 1.5%, passed on to the customer in many cases, for BNPL it is 4% and legal contracts prevent the merchant from passing that cost on. Added to which, most banks as well as Visa and Mastercard offer BNPL style / pay in 4 / 8 accounts.
If they included tis information in their podcast it may have made more sense IMO
ZIP Price at posting:
$1.70 Sentiment: None Disclosure: Not Held
(20min delay)