The target demographic of BNPL are low income earners, most probably people who are at the beginning of their career with little to no savings. The value proposition of BNPL is strong for this group who may have cash flow issues. But my concern with this industry in general, is their income are currently artificially supported by government payment. If jobs are not supported by real employment, there will be increase in insolvency in the near term.
If the big 4 banks (no matter what you think of them) are reporting significant increase in provisions, you can't and should not assume this will not affect other lenders.
End of day, no one know's what the actual loss will be from loan losses post covid, this very much depends on the economy. If you want a forward indicator. Then it is best to look at the general credit default trend and then make a guesstimate on the target demographic which BNPL operates.
How well credit is accessed from one BNPL to other is the key metric with performance, growth is important, but at what cost.
Look at Westpac, Lloyds their loan books are horrible.
I don't own any BNPL stocks and I have zero clues on Zip. The above is a generalisation and reply to the Goodfella59 post which i find interesting and valid.
This space is very interesting, from a consumer behaviour perspective. But apart from that, this is my two cents worth (if anyone cares).
Z1P Price at posting:
$5.99 Sentiment: None Disclosure: Not Held
(20min delay)