I disagree. Though BNPL is here to stay you will not see a whole plethora of companies serving different market segments. The biggest in market presence will prevail and maybe it'ts nearest one or two competitors will remain.
APT, OPY and Z1P and maybe a few others with deep pockets and world-class management have the opportunity to develop this presence in the marketplace. Second to this, the competitors are stocks, commodities even, great for a short term position, but not competition at all.
Case study in point Paypal. Can you offer me a list full, even a handful, of their nearest competitors?
Or let's look at the banking industry in little old Australia. We all know the big 4. Beyond that?
In 2k15 there were 75 credit unions, 12 mutual banks, and 6 building societies operating in Australia! Can you name half of them? I know I certainly can not.
Point in reference, where there is a hot chip or two to be taken seagulls will swarm. But never mind the seagulls
In the US market, and in fact all markets, we typically see that first is better than better. Take Kleenex for example, White Out, Bandaids, Panadol and so forth. Once your product name becomes synonymous with a product, with the entire class of product, the competitors are left to compete on price. A very slippery slope indeed.
Getting to scale, achieving market presence, creating consumer awareness are all far more important than simply remaining. Sure, Ebay acquired Payal but not before intense competition and attempted hostile takeovers.
Mergers and Acquisitions are not out of the question, but for any company aiming to compete in the highly lucrative BNPL space getting to scale is absolutely imperative! Scale is the critical factor here! Whether APT, Z1P or OPY will achieve this faster than the next man is a matter for conjecture.
Scalability is the most important determinant of longer-term sucess pf all BNPL companies, profitability will come later... Trying to achieve both is little more than a compromise at best. So don't worry about short term results, this is merely a trade-off of capital reinvestment and growth for short term figures on the book. Look at Amazon, dismal results year on year and now the biggest company on the globe.
I am a holder with a long bet, but have no doubts that if any of the competitors achieve a much greater scale of operations, irrespective of market offering, value, spreadsheet numbers, graphs, and profitability, Z1P is dust!
All IMO DYOR
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