I'm a pretty big BNPL bull, on most of them actually, but I find this situation very challenging to navigate - perversely I find it harder to predict what might happen in say 6 months to a year than I do in over a week or two, which is sort of opposite of the long-term investor. My primary concerns are:
Bad debts - I think the company is well placed to tackle this due to the balance sheet strength, but it's hard to know what might happen here. I suppose at the very least people that have found themselves out of work will be receiving some government support, which coupled with very low balances (i.e. prob around $100 - $200), should hopefully see them repaid. Having said that, I also think if it's a choice between food and repaying that pair of shoes you bought a few weeks back, regrettably BNPL would come last. Having said that, I also think if it gets to that point, than we're all in a much much more dangerous place than expected.
UMS - surely this will get smacked hard - whilst many online transactions are still progressing, you'd have to think demand has tanked due to both income insecurity (or flat out being unemployed), plus disruptions to retail operations.
SMEs - a worry of mine is that SZL's merchant base is disproportionately SME - I don't have any evidence/data to inform this, but I am worried many of those merchants could go to the wall, but I suppose you could counter-argue that larger companies would have higher overheads and thus may find survival in this environment more difficult, whereas SMEs could 'hibernate' more easily for a couple of months.
Timeframe - the idea the US will reopen for Easter I think is pure fantasy, as much as I would love to believe it. The fact remains that until it's clear those daily infection/new cases rates are coming down, and consistently, in response to enacted measures, we're very much still in trouble.
Having said all that, they continue to add new medium-sized merchants (as promoted on Instagram) each week, and pleasingly they seem consistently to be larger. Google Trends is also useful but again can be tricky to draw meaningful conclusions when checking so frequently, but at this stage neither SZL or APT seem to have dropped off a cliff (for previous weeks that is). We may well see that given how small SZL is at this point in time, they may well continue to growth throughout this period, albeit at a slower rate. Agreed that if they can work through this period, and I do think (nervously) that they can, these prices will be viewed as incredible, however I think we're a long way from this nightmare being over.
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