Your other main regulatory concern should be RBA, the overseer of payment systems in this country. They have absolutely declared a level playing field mandate and will be coming for BNPL vendors denial of retailers to pass on fees. They've already opened the doors to stakeholders responses back in November 2019 (a follow up paper was due mid-2020 but will have been delayed by COVID-19 no doubt, but may appear any time soon) and retailers have a long declared aversion to their inability to pass on BNPL fees. Removing those conditions is entirely in line with their long held mandate. Their specific language in their BNPL review section in November 2019:
"The Bank has long been of the view that the right to apply a surcharge on more expensive payment methods plays an important role in signalling the costs of different ways of making payments to consumers. If a business chooses to apply a surcharge to recover the cost of accepting more expensive payment methods, it is able to encourage customers to consider making the payment using a cheaper option. The possibility that a consumer may choose to pay with a lower-cost option when presented with a surcharge also helps put competitive pressure on the pricing policies of payment providers, indirectly lowering merchants’ payments costs. By helping keep merchants’ costs down, the right to apply a surcharge means that businesses can offer a lower total price for goods and services to all of their customers".
People can argue all they like that retailers will not pass on the fees (a little naive amidst the very digital technology that allowed BNPL's to prosper) or that users of BNPL will pay them if they do (defeats the very same arguments of most BNPL users being astute users), but one way or another the denial of retailers to pass on BNPL fees under their present contracts will be removed by the RBA just as it was for credit cards many years ago.
BNPL's will of course remain a very valid and useful payments system, but the moat everyone in retail likes to speak of will most definitely be drained in Australia and EU/UK will follow.
APT Price at posting:
$68.82 Sentiment: Sell Disclosure: Not Held
