"Square ‘could become sixth pillar’ of the banking sector." -...

"Square ‘could become sixth pillar’ of the banking sector." - AFR 06.08.21

"Banks are fretting about the real possibility that the horror show that was the rise of buy now, pay later could now be repeated on the merchant side. Afterpay grew like a weed by operating outside the credit laws, meaning it didn’t need to conduct the rigorous, upfront customer checks asked of banks. Bankers say they’re getting nervous that these (mostly) US payment companies could win retailer relationships with snazzy software and devices, then offer banks’ customers loans without having to comply with the full gamut of banking regulation and investment in maintaining critical local infrastructure.

A lot of financial institutions are starting to scratch their head and say, "if Square is able to provide a one-stop-shop for merchants, they could provide a category killer here in terms of the product offering,” a senior adviser to the banks said this week. "They could become a sixth pillar in the Australian market."

Analysis of the threats of bank disruption from big tech mostly focuses on the retail side but it’s this lesser-known side of providing retailers with payment services, known in the industry as “merchant acquiring”, where banks also face a clear and present danger. Institutional investors in Square say their bet is that the NYSE (and soon to be ASX-) listed company run by Jack Dorsey will be better than banks at using that data, and even more so it if can successfully integrate Afterpay, bringing the retailing and consumer networks together.

For Australia’s banks and regulators, Square’s dramatic acquisition of Afterpay this week is not a case of the barbarians being at the gate; rather, it shows how big tech has walked right through, and is now operating deep inside Australia’s financial system."


Banks are now shaking in their boots with the rise of BNPL. The Square/Afterpay deal will take Zip to a whole new level.
With Zip becoming the number 1 ASX listed BNPL, all the sharks will be circling for an acquisition.
IMO - a takeover down the line is inevitable.