I think you are that kind of people who just pick selective...

I think you are that kind of people who just pick selective statements to fit your narrative and existing bias.

Firstly you are making an assumption which is partly true for some customers not all; that they recklessly spend money on crap. I don't know what constitutes crap for you and whether or not your assumptions is based on some study or researched or news you read or its just your own thought your presented as facts.

But for now; lets assume people are falling behind payments and spending recklessly. Now the strategy and regulatory pathways BNPL industry have to recoup that money is limited. If same customer is falling behind credit card or mortgages payment that person will prioritise mortgages or credit card payment, reason for such behaviour is "consequences factor" meaning they don't want foreclosure, hefty fines and plummeting credit scores so they priorities credit card payment and mortgages.

However they don't have to worry able all those things when it comes to BNPL. On top of that, media labelled them as vulnerable customers and demonise BNPL business. Why?? The most important reason is lack of regulation; so i talked about regulation being beneficial for industry; as it will provide protection for both consumers and businesses. Once that happens, customers have to prioritise BNPL payments as well. Thats why i emphasised debt collection process, quality customers retention, good and sound regulatory frameworks. However your are just stuck on inflation argument not seeing the overall business proposition. Why would i use credit card if i have cheaper options on my disposal? I'm the user of both and my numerous friends use it - they like it and have already canceled their credit card.

Do you know in Australian Operations, ZIP are cash positive?
If your argument is true buying craps and all, Australian business should have suffered as well. Its the US where company is bleeding and now whole sector including Affirm, Klarna, ZIP, Sezzle, Afterpay ; have shifted mentality from " grab customers at all cost" to profitability. This will be beneficial for whole industry.

But if managed well, this business won't go bust. Demand is really high for their offerings and every research and market survey points to this.