Indeed, the higher effective interest rate proves that the penalty is sufficient to cover an underlying line of credit interest rate.
"That '0.6% of sales' is 10-20% of APT revenue and the entire gross profit. It is a massive number." The point is that the percentage of losses appear to be inline than those of some credit card companies. Maybe they should learn from Amex and create a losses reserve to soften the write-offs: "In estimating these losses, we use statistical and analytical models that analyse portfolio performance and reflect our judgement regarding the quantitative components of the reserve. The models take into account several factors, including delinquency-based loss migration rates..."
I do not think BNPL has to run as a scam, but I do think it is over hyped.
