Long Holders, ZIP 2024 Retrospective A Year to Remember, Victory Dance Time, page-202

The proposed rule changes by the Reserve Bank of Australia (RBA) to allow merchants to surcharge their BNPL fees are likely to have significant implications for Zip, given that 60% of its income comes from merchants. The probable outcomes include:

1. Reduced merchant adoption: Some merchants may choose to pass on the BNPL fees to consumers, potentially making Zip's services less attractive and leading to decreased usage
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2. Pressure on fee structure: Zip may need to lower its merchant fees to remain competitive, as merchants gain more bargaining power and can threaten to surcharge or switch to lower-cost alternatives
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3. Impact on revenue: With the potential for reduced usage and lower fees, Zip's revenue from merchant income could decrease significantly
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4. Shift in business model: Zip may need to restructure its offering or explore alternative revenue streams to compensate for the potential loss in merchant fee income
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5. Increased competition: The rule changes could benefit incumbents and larger financial institutions offering BNPL services at lower or no cost, potentially reducing Zip's market share
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Overall, the proposed rule changes are likely to put significant pressure on Zip's current business model and profitability, forcing the company to adapt to a more competitive and price-sensitive market environment

*and anybody who offers their own BNPL product (ie: rather than the third fork) is EXEMPT