Perhaps zip is willing to take this pay cut because it is the...

Perhaps zip is willing to take this pay cut because it is the only BNPL operator that has the business model to be able to do so and still make money

If merchants no longer have to pay the crazy fees involved with offerering BNPL services then no one will offer zip or afterpay or klarna or anything and what will be left is what we had in the first place. visa/mastercard/amex except zip gets the customers instead of the banks but also people will have no issues being a customer of the bank AND a customer of zip. But its rare that people are a regular customer of 2 or more banks.

So yeah it may shoot the whole industry in the foot. it may kill everyone except those who operate more like a traditional bank/credit card which to my knowledge is no one else, at least not as customer fee heavy as zip.

Do you think they would make more money as a BNPL that gets 40% from merchant and 60% from customer fees and has to compete with an ever increasing number of competitors or do you think they would be better off just living off the 60% fees and having no competition at all except for credit cards and banks which its been made very clear is where people are exiting from in droves?

Yes there is nothing stopping anyone else from changing to this kind of model so they can continue operating but this time zip would be the market leader and everyone else would be playing catch up.