BNPL certainly has some challenges ahead to maintain the growth...

BNPL certainly has some challenges ahead to maintain the growth rates they have enjoyed. This issue with BNPL has always been the low barriers to entry. Put really simply, all one needs is an app, some money, and a marketing brain and they can launch an offering.

In terms of competition, there will most likely be consolidation in the sector. Those that are small and viable will probably get taken over and those that are small and not viable wel...

HUM is fortunate to have a traditional business offering which is outside their BNPL. They also make money which is unusual for the sector but will be a real positive if the investor demand dies off when growth rates subside. They can continue to fund their business through earnings rather than relying on the market for capital which is something the other players don't have at their disposal.

You are right in that there will be pressure on merchant fees. This is particularly a risk for APT who relies solely on merchant and late fees for revenue. HUM's BNPL revenue is supplemented by user driven revenue which will bode them well in the medium term. Z1P has a similiar string in their bow.

Notwithstanding, HUM has some proving to do to the market to gain trust again. It's been a good few years now of a shrinking business and they'll need to piece together a couple quarters of growth to change that perception. Thankfully, at current valuation there is a lot of disappointment priced in and I'd rather get my BNPL exposure through HUM at 6x forward earnings than say Afterpay with trades at 33x estimated revenue.