Alan Kohler interview with Larry Diamond Alan: The financial...

Alan Kohler interview with Larry Diamond

Alan:
The financial markets are pricing a 70 per cent chance of a recession in the United States. What happens if there’s a recession?
You’ll have trouble controlling your credit losses then, won’t you?

Larry:
I think we play in a really interesting part of the market. At the end of the day, if you look at the average repayment amounts for buy now pay later, it’s anywhere from $20 to $40 to $60 a month potentially, so we’re not talking about a lot of money that customers need to repay and we probably argue that the demand for our product become even more important during times of inflation and recession, but give customers the ability to sort of smooth cash flows over their payment cycles. Unemployment’s been at the lowest level for many, many years, so a lot of these macro wins actually we think are accommodating for buy now pay later, as long as people stay employed and we’re not providing $14,000 personal loans where you can be impacted by employment or some of the macro factors.

We’re talking about very, very small repayments and the balance is amortised very, very quickly. But again, we have the ability to adapt the portfolio based on certain sectors, verticals, employment categories to manage through this. We did this at the outset of COVID last year and delivered really, really strong results.