I don't agree with this. Apple et. al are just flexing.
At 5% profit per transaction (typical for BNPL) you have to keep bad debt under, yes, 5% to not throw your money away.
Why would anyone take that risk just to onboard customers? What's your credit policy here, exactly.
Buy something online -> pay your deposit -> skip the rest ->never allowed to use the service again?
"Oh we'd love you to buy this item but you still haven't paid this order from 3 years ago"? They'll just save up and pay cash if the credit facility isn't available. We don't have a good record in Australia of making people pay outstanding contracts, would be a pretty significant legal change!
And 5% margin makes it seem mighty expensive to do a proper credit worthiness assessment.
Unless you regularly forgive bad debt you're just racing to the bottom. Applying a low cost credit facility to every day transactions doesn't really help anyone except people who won't really make you any money.
I don't agree with this. Apple et. al are just flexing. At 5%...
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