Australian (ASX) Stock Market Forum

Buy Now Pay Later (BNPL) Stocks - which one and why?

Joules MM1

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from a small retailers point of view - an utterly dunmb idea - that concept is a bomb waiting to go off
in a manic equity boom (which we are only part way thru) any BS is acceptable in the grab for cash
 

Dona Ferentes

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The Reserve Bank wants buy now, pay later providers, including Afterpay and Zip, to remove rules in their contracts with merchants that prevent the payment costs of the services being passed on to customers.

The about-face by the central bank, set out in a conclusions paper for its review of retail payments regulation, comes after “strong feedback from merchants that BNPL has become an essential payment offering for many of them and that the high cost of these services was pushing up their payment costs,” the RBA said.

After signalling last year that buy now, pay later providers could maintain the preventions as they build a customer base against bank-issued credit cards, the RBA has backflipped and has now concluded “it would be in the public interest and consistent with its mandate to promote competition and efficiency in the Australian payments system for BNPL providers to remove their no-surcharge rules, so that merchants can apply a surcharge to those payments if they wish.

This approach is consistent with the board’s long-standing principle in relation to no-surcharge rules,” the RBA said on Friday.
 
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With apparently 60% of BNPL users saying they wouldn't continue to use if they had to pay a 4% surcharge, the RBA comments are yet another hole in what is becoming a somewhat leaky boat - one that is likely to see only the survival of the fittest.
 
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Some time ago I did a little back of Guinness stained coaster calculations on the business viability of all the BNPL stocks.

My hazy recollection was that they didn't make a lot of sense, not at least for the valuations at the time... and had kind of considered that I had missed the boat as far as momentum trades.

A quick perusal of the antichrist press to check on updates for fear pr0n, I spotted an article showing they are reporting big losses.... Confirming my scientific <cough> analysis.

Any thoughts gents, gentesses and others?

 
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With apparently 60% of BNPL users saying they wouldn't continue to use if they had to pay a 4% surcharge
There's something not quite right about being offered finance on a $10 purchase.

Anyone taking up such an offer, and willingly paying interest, is someone who's an extremely long way down the list of people you'd sensibly lend money to.

For the rest, surely they're using it only due to convenience and being effectively free.

Only time I've even thought about using such a thing personally was online due to the offer of a discount. That is, cheaper to pay via one of these services than to just pay outright. Even then, for the relatively small discount I didn't bother. :2twocents
 
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I'm old school (very old school) and never cease to be amazed by people who rather than grab a bite of breakfast at home will pay exorbitant prices for their mashed avocado and very expensive designer coffee (my 27 year old daughter would need a Youtube video to work out how to turn our oven on). I drink black tea and begrudge paying $5 for a tea bag and hot water. Went to a 'cheap' suburban pizza restaurant the other night (I'd forgotten these exist with Covid) and they were looking for $39 for a pizza. We make our own and forgetting about staff and overheads the base and topping might have cost $5 to make. The public seem happy to pay these prices for convenience and financing $10 when you don't have $10 cash is just an extension of this convenience factor of having something now rather than waiting.
However, I'm with you Smurf - anyone who needs to borrow $10 shouldnt!
There was as item on the TV news last night saying that apart from Afterpay whose price has been held up by its sale to Square, the rest of the wannabe BNPL have lost about 40% of their value in recent times.
 

Value Collector

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I'm old school (very old school) and never cease to be amazed by people who rather than grab a bite of breakfast at home will pay exorbitant prices for their mashed avocado and very expensive designer coffee (my 27 year old daughter would need a Youtube video to work out how to turn our oven on). I drink black tea and begrudge paying $5 for a tea bag and hot water. Went to a 'cheap' suburban pizza restaurant the other night (I'd forgotten these exist with Covid) and they were looking for $39 for a pizza. We make our own and forgetting about staff and overheads the base and topping might have cost $5 to make. The public seem happy to pay these prices for convenience and financing $10 when you don't have $10 cash is just an extension of this convenience factor of having something now rather than waiting.
However, I'm with you Smurf - anyone who needs to borrow $10 shouldnt!
There was as item on the TV news last night saying that apart from Afterpay whose price has been held up by its sale to Square, the rest of the wannabe BNPL have lost about 40% of their value in recent times.
You could say the same for any restaurant meal I guess, if you don’t have much money, then it’s worth it to you to cook at home, if you have loads of money, or really enjoy eating out as a life experience then it’s worth it to spend the money.

As for buy now pay later stocks, my favourite is CBA, the strong earnings and dividends are nice.
 

Value Collector

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There's something not quite right about being offered finance on a $10 purchase.

Anyone taking up such an offer, and willingly paying interest, is someone who's an extremely long way down the list of people you'd sensibly lend money to.

For the rest, surely they're using it only due to convenience and being effectively free.

Only time I've even thought about using such a thing personally was online due to the offer of a discount. That is, cheaper to pay via one of these services than to just pay outright. Even then, for the relatively small discount I didn't bother. :2twocents
There was a time in my life when If I wanted a book I would have to lay by it, and pay it off over a month of so, if I had the option to make the same payments but take the book home and read it a month earlier, It would have been great.
 
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