I think you raise some good points and others may have other opinions but here are mine:
My question is whether there's any significant first mover advantage here other than branding.
In my opinion there is a significant first mover advantage because of the benefit that Afterpay (and other BNPL provides). From a retailer perspective, when looking at adding BNPL you have similar companies to choose from all charging similar fees. So when given the options, why wouldn't you choose the one that has the most customers as well as the most lead referrals. This means that, if a retailer chooses to offer 2 or 3 BNPL options it's almost guaranteed that, as the market leader you are one of them.
Additionally, being the market leader and providing the most benefit (through access to more customers and lead referrals) you wouldn't ever be in a situation where you'd have to negotiate your fees. In contrast you might have Z1P that wants to also be offered but they have less customers and leads than Afterpay and the merchant may negotiate smaller fees. However, that point is rather debatable because the merchant may not be bothered whether they pay 4% to APT or 4% to a competitor.
Once I'm a retailer I could similarly switch to another provider.
There is no reason for a retailer to switch away from the market leader. It's more likely that retailers offer a couple of BNPL options. If Afterpay has 5 million customers and 6,000 lead referrals and Z1P has 2 million customers (acknowledging some customers cross over) and 1,000 lead referrals, why wouldn't you want to have them both on board. In this situation you're far more likely to let go of Z1P than APT.
Once I'm a user of Afterpay, it seems very easy to switch to another provider who does the same thing.
This is true, but why would you? Afterpay has the highest satisfaction ratings and the most merchants so again as the market leader they are in a good position to grab customers and hang on to them. People don't randomly switch BNPL providers, they would have to have had a bad experience with one to switch to another, or a lack of merchants (again boding well for Afterpay with the most merchants). I track the reviews Afterpay has because I do agree with you, if Afterpay gives people reason to switch then they might. But they seem to be doing a good job in keeping customers happy and their app is also world class so that's not going to be pushing customers into competitors anytime soon.
You have a lot of very good questions, but I think you're not realising that many of the things you have listed specifically benefits the market leader. Easier to add merchants and customers, more likely to maintain profit margins etc. All in my opinion of course.
APT Price at posting:
$67.32 Sentiment: Hold Disclosure: Held
