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I'm amazed how this article makes gloomy predictions about BNPL's profits without making any reference to MDR, which is the single largest source of revenues for BNPL. At 4-6%, BNPL makes twice what credit card does - 2-3% in unregulated markets.

Among VC-backed businesses, BNPL happens to have one of the best unit economics.

My "Waiting for Godot" feeling about ISO 20022 got stronger than when the following article was published in 2019.

Ripple accused of making false claims about Swift error rates

...and you have an extremely vivid imagination.

People borrow money to put in fixed deposit, that doesn't mean fixed deposit is debt.

Likewise, borrowing money at interest from somebody else to make BNPL repayments does not mean BNPL is charging for its debt. If you don't pay interest to BNPL company, then it is free debt. Period.

Yes, just that BNPL can claim longer free credit period, say, 60 days, compared to credit card, which is free credit for 15-50 days depending upon the date of spend. 

Maybe because I'm in marketing, I never underestimate the consumer. Besides, as BNPL penetration increases and the number of BNPLs used by consumers increases, there will always be startups that will help consumers to consolidate their BNPLs.

I never said BNPL is free for everyone. I only said it's free credit for the customer, which it is. Merchants pay 4-6% MDR for BNPL. Such a high merchant fee is the reason why, by the standards of VC-backed businesses with high cash burn, BNPL has one of the best unit economics.

Sympathies for the victims and all that but what did they expect when they handed over their online banking creds to callers?

In all the kerfuffle about identity, confirmation of payee, etc., we forget one basic human behavior trait: Even if the caller were a genuine bank employee, there will be too much temptation when they get the customer's banking creds. That's precisely why banks limit access to customer accounts on a strictly need-to-know basis among their employees.

"Interest Free Credit" means Free. Period. 

If customers start revolving credit, then Klarna will charge interest. If Klarna charges interest, there may be half a dozen other BNPLs who may offer to balance transfer Klarna's credit free-of-cost. 

While checking account has a lot of lock-in, we already know that people have different credit cards to get best deals from different merchants. Compared to credit card, BNPL has even lower lock-in.

Every line item on a credit card statement is a separate loan account in BNPL and an opportunity for yet another BNPL. There's ZERO switching cost from one BNPL to another. In fact, there's nothing stopping a customer from being a customer of multiple BNPL providers concurrently.

Tch tch... Surprising that Volt didn't get a White Knight in the form of a Fast Follower Bank, as dozens of fintechs have managed to in the past in what I call the FI Innovation Playbook. 

I said BNPL is free debt.

I didn't say BNPL is not debt.

It's not just Legacy v. Cloud.

Many banks are exploring moving their Legacy Apps (that are Onprem) to Cloud. The applications themselves remain unchanged. What changes is where they're run.