This is deteriorating - can we get back on topic. Afterpay's great benefit is its beautiful simplicity. You get credit - you pay it off in four instalments, either over 6 weeks or 8 weeks. Of course this extension of credit needs to be paid for - and is covered by the 4 - 6 % fee charged to merchants.
Visa's pilot program is unknown but says you will be able to choose to split your payments at the point of sale. There is no mention of an extension of credit, times, no. of instalments etc. The open ended offering suggests that it will more than likely be a little clunky to start with but over time will be useful for larger puchases - more than likely outside of APT's market offering. Can somebody here who thinks Visa offering is going to be a major threat explain where the competitive advantage will be. Financing cost will be the determining factor of any offering and this has nothing to do with Visa & everything to do with whoever is extending credit (currently anywhere between 10 - 20 % on AUS credit cards & likely similar around the world versus 4 - 6 % APT). The risk will be the merchants decide to then put the financing cost back on the banks - however this would erode their margin & open up further credit risk?
