Big Future, page-20

this is a young industry in Australia and its going to be interesting to see how things play out. On the one hand there is clearly a lot of companies with the ability to develop and deploy the technology solution of a POS interest free payment solution for consumers. AFY, ZIP, FXL, HSBS in the listed space and quite a few others in the private space. All do it slightly differently. Other than technology the other key factors will be customer(retailer) retention, credit losses and access to capital. As is the case in the more traditional Fintech space, a lot of new lenders haven't experienced a softer credit cycle nor have they experienced the operating cost of chasing bad debts, let alone the pain of righting off losses. As many of these funders are in many cases funded by others, the ability to retain access to well priced capital may be tested if losses emerge. So for now it seems its a race to grab market share by signing as many retailers as possible. It will be interesting to see the extent to which retailers over time may switch between providers to get better terms, given that its the retailer that is in effect paying the consumers interest payments in a no-interest POS deal. I'm guessing that in seeking to get market share, the fees being charged to the retailers by some of the providers may turn out to be on the low side. Its going to be an interesting space to watch. The final factor is the economic cycle, with most operators having not experienced a downturn. This will ultimately be the defining moment for this space and the other Fintech newbies.