From the consumer's perspective, it offers a lower barrier of entry to credit. From the business perspective, it offers another avenue for customer acquisition.
I saw it as a potential replacement to the $500 credit limit cards that were available many years ago for students and those starting their journey into credit cards. After the banks stopped offering them, it was either a sign that it was not profitable or the market was too small.
I believed BNPL, APT in particular, could capture some of that old market and operate on the same fundamentals as no annual fee, 55 interest free day credit cards. e.g. Rather than 55 interest free days, the interest free period is practically set to 28 days (4 weeks) with the interest being paid upfront from the merchant fees.
That is the reason I bought APT and not Z1P, it seemed more plausible considering the existing financial products on the market.
I think the whole sector tried to grow too quickly, but I do not think it was done to cover for losses, I believe expansion was purely driven by ambitions of becoming the biggest fish in the pond. Perhaps now they can adjust their model to a sustainable one and retreat from unproductive positions.
Z1P Price at posting:
$3.33 Sentiment: None Disclosure: Not Held
(20min delay)