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by dehrmann 1454 days ago
I wouldn't touch that business because as soon as it gets much traction, credit card companies will move in with similar offers. What's weird is that BNPL merchant rates are significantly lower than interest rates on credit cards. Either interest rates on credit cards are too high, BNPL is being subsidized by VC, or merchants are assuming the risk of tail events.

On the merchant end, I'd worry that this is a one-time incremental bump in sales in exchange for an 8% financing charge. That might be more than they pay for bonds.
2 comments
hakfoo 1454 days ago
I believe Visa is moving in a direction where they will be integrating installment options in the conversion flow.

https://usa.visa.com/partner-with-us/payment-technology/inst...

When I looked into it, it seemed to be a small-scale trial-- a handful of merchants and a single card issuing bank-- but I suspect the point is to define and bulletproof the interface before throwing it out to the world.

It makes sense to me: BNPL is a feature, not a product, in the payments ecosystem. No consumer wants to say "Well, I can only shop at merchants X, Y, and Z, because only they accept the BNPL platform I want to use." and no merchant wants to say "let me integrate with 25 different BNPL platforms each with their own API gremlins". If you end up with four monsters of the market-- one from each major card brand-- that's probably worth it for the volume each one can provide. It also likely means that they'll turn into things you just see as add-ons for popular shopping carts and payment modules. Maybe the "embeddable card entry form" your payment processor offers suddenly sprouts a new field to show BNPL plan choices.

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mgraczyk 1454 days ago
Chase has been doing BNPL for around 2 years (My Chase Plan). It's a different UX than other BNPL like affirm, and they don't own a spot in the conversion pipeline so I think long term that will hurt their ability to compete. I'm not super familiar with Chase's business though, maybe they have something in the pipe that would improve the situation for them?
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dehrmann 1454 days ago
It'd have to be part of the checkout flow for customer certainly, so either the payment processor or card network would have to make it happen since there are so many issuers.
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toomuchtodo 1454 days ago
Can't speak to Chase, but Amex offers this post purchase with a fee. Could offer it without the fee considering they're charging the merchant fee anyway, but I suppose they've done their revenue research.

https://www.americanexpress.com/en-us/credit-cards/features-...

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