The thing about a % of bad debts in bnpl is that you don't annualize it or give it a growth rate...
2% for one month does not indicate 24% for the year. it means 2% over short periods is 2% over long periods if it doesn't increase.
secondly, they are targeting a particular rate. they've said in reports that they wanted about 2% bad debts to balance growth with debts. too low and youre giving away growth...too high and it negates the benefit of the growth. Goldilocks is about 2% according to zip.
So i wouldn't worry. super short duration debt is the easiest to manage risk on as it's more about the ongoing relationship than the transaction itself.
Ann: May Trading Update - Another Strong Month During Covid, page-56
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