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Interesting developments - Compliance and regulatory issues seem to be causing problems that are imploding on the team at Revolut.... as the media has it: "Some speak of a new maturity in Storonsky, who’s been criticized before for a toxic and target-obsessed work culture."   https://www.bloomberg.com/news/articles/2022-05-06/revolut-33-billion-banking-app-wants-to-play-in-the-big-league

This is one of the most popular features of Credit cards in the Middle East - though often called either EPP or IPP  "Easy" or "Installment" Payment Plans..... They can run up to 24 months and may be Intrerest free..... I bought a $25,000 dollar Mitsubishi Shogun Sport with one of those...... its all about the interchange and loyalty !  But BNPL has a better ring to it I suppose..... BNPL is  more Millenial friendly - but is still debt!   And there is absolutely nothing wrong with that!!!!!   Lets call a spade a shovel shall we ! Triples all round !

I suppose this means male fraudsters will find it easier to fleece female punters - or vice-versa (just for inclusivity) when it comes to speaking to call-centres. Fraudsters have never been too worried about the gender of their victims. Whilst social media focuses on knowing 'everything' about consumers, banks want to know less?  

see a couple of notable failures below  Facebook buys successful businesses - its track record of launching new ones is not all that great. In app purchases in an environment as short lived as instagram may struggle with stickiness!   Just an opinion from a seasoned observer... maybe the Metaverse is a better location and this is just a pilot? 

Novi wallet failure  

https://www.finextra.com/newsarticle/40572/meta-to-shut-down-novi-wallet?utm_medium=newsflash&utm_source=2022-7-4&member=135864

Libra failure 

https://www.cnbc.com/2022/07/01/the-last-remnant-of-facebooks-crypto-project-shuts-down-september-1.html

Wow - i wonder how long this one will last before it gets shut down by Meta?

Well Sequoia would say that wouldn't they - have have a highly depreciated asset on their books - still valuable and very popular either with the less financially savvy consumer..... or the VERY financially  savvy consumer......  but here come the regulators!  Remember Wonga, and watch this space!

Then they will be well placed to weather the storm....  We can follow the stock price in successive funding rounds.... some more on the fundamentals: 

1. Klarna’s total operating expenses climbed 70% last year to 15.7 billion Swedish krona ($1.6 billion), but total operating income rose only 38% in 2021 to 13.8 billion krona ($1.4 billion).

2. Still, Klarna said its operating losses for the 2021 calendar year widened to 6.58 billion krona, or $688.85 million, from 1.63 billion krona in 2020, Reuters reported. 

3. According to data from the New York market research firm Yipitdata, Affirm dominates the U.S. market with a 40% market share, based on payments volume, followed by Klarna with 19.6%, Afterpay with 16.4%, PayPal’s Pay in 4 offering with 11% and Zip with 4.2%. The universe of rivals is rounded out by smaller players that have been acquired or will be soon, including Sezzle, which was swallowed this year by Zip.

4.As growth slows, it will become harder for BNPL providers to make money, partly because it will become more difficult to satisfy the demands of customers looking for the best deal. That in turn will make it tougher to meet the expectations of investors looking for a return on their investments. None of those efforts will be easy or cheap.

So the higher valuation was due to the existence of a perfect environment and the loss is all due to the move to a challenging environment, nothing to do with regulation, operating losses, lack of cross checks between different BNPL and other credit providers then,,, its all due to weaknesses in other players and the market?  I see. 

Because it was over-hyped..... just like all the Payday loans companies....  did you see the most recent  Finextra announcement on Klarna, large operating losses are kicking in now....Remember.... Valuations are just that... Until someone puts their hands in their pockets they are only a hope and often hype  :-)  You are now allowed to slap your own forehead and say.... DOH!    

Klarna is closing in on a funding round that would see the BNPL giant's valuation slashed from $45.6 billion last year to just $6.5 billion, according to the Wall Street Journal.weden's Klarna is working to raise about $650 million, most of it from existing investors led by Sequoia Capital, says the Journal, citing anonymous sources.

The valuation would represent a massive discount from last June's $639 million funding round, when the firm was riding the buy now, pay later wave.

To claim that MDR is the value in this for the operators is to ignore what comes later..... People borrowing from Payday lenders, loan sharks, Credit cards, etc, anything but free of stress.... If 2 in 5 users have had negative impact on credit score then something is wrong, I have added some more research extracts and links below  if you want to check it out                     52% of people who have used BNPL in the last 12 months have another debt or repayment to manage alongside their BNPL payments. 1 in 5 people that have other debts to repay say that these only started after they first used BNPL. For those already in debt when they started using BNPL, 17% have seen their debt get worse in the last year and 45% attribute this to using BNPL. Buy now pay later has a knock on impact on people’s other debts. 2 in 3 have prioritised paying a BNPL fee or repayment instead of another debt or repayment. The financial impacts of struggling with buy now pay later purchases are long-lasting. 2 in 5 BNPL users have had their credit score impacted by using BNPL.                                                                               https://www.citizensadvice.org.uk/Global/CitizensAdvice/Debt%20and%20Money%20Publications/BNPL%20report%20(FINAL).pdf