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Nice article with tons of data on BNPL economics.  

It's easy to answer the question in the title of this post. BNPL is a VC funded business. VC portcos remain unprofitable for a long time - even up to and beyond IPO. Testimony: 83% of tech companies that IPOd in USA in 2019 were making losses at the time of IPO and many of them are still not profitable.

The VC model relies on high growth, disruption posturing and rapid rise in valuation. Extreme hype is a feature, not bug, of VC funded industries. The hype around BNPL shouldn't come as a surprise.

I fail to see how money sent to a scam investment firm can be a form of APP fraud.

Next what, if I buy a stock and it goes down, can I claim APP fraud and demand to get back the money I sent to my broker?

For the merchant, one of the main advantages of A2A payments (like FPS, UPI) is irrevocability. The way APP regs are progressing, I see A2A slowly morphing into a revocable method of payment and thereby losing one of its USPs against credit card payments.

I fail to see how money sent to a scam investment firm can be a form of APP fraud?

Next what, if I buy a stock and it goes down, can I claim APP fraud and demand to get back the money I sent to my broker?

For the merchant, one of the main advantages of A2A payments (like FPS, UPI) is irrevocability. The way APP regs are progressing, I see A2A slowly morphing into a revocable method of payment and thereby losing one of its USPs against credit card payments.

PNBL is the same as Layaway, which has been around in USA etc. for ages. In the age of instant gratification and free credit provided by BNPL, PNBL is extremely quaint.

Indeed. I quite like daloopa's unstructured data extraction system. In our pilots with daloopa, we're getting savings of 95% efforts in extracting data from regulatory filings.  

Further proof that budgeting, categorizing spend, escaping bankruptcy by avoiding that $4.99 coffee etc. really don't float people's boats. Even without any Open Banking regulatory mandate, around 80M Americans have shared their banking data with third party apps in return for free overdraft, stock trading, automated savings, etc. Seems quite clear where open banking has its strongest value proposition.

There's no Open Banking regulation in USA. Still the fintech industry has created tremendous value for data exchange in the form of apps for stock trading, wealth management, automated savings, money management, etc. Exhibit A: One in four people in USA - around 80M in total - is a user of one or more of these apps and has shared their banking data with them. 

OTOH, in EU / UK, Open Banking is a regulatory mandate, it has been in the works for nearly a decade, and still there are fewer than 5M users of Open Banking apps. Seems like not even 14% of industry insiders have a clue about how to create value from Open Banking. If they stopped their obsession with scraping v. API, I'm guessing they'd have greater success at creating value from Open Banking. 

Given that there are 4500+ FDIC-insured FIs in USA, it's a no-brainer that "Consumer finance is an extremely competitive space."

But, given that all of them charge the same 2-3% MDR for credit card processing, you can't fault some people - especially Merchants - for believing that banking is a monopoly. 

As a marketing professional, I often wonder, if a bank were to slash credit card MDR by half and boost Rewards by double, wouldn't it be able to make huge market share gains in the credit card space without spending too much money on marketing?

I'm guessing such a bank would still be quite profitable, considering that credit card has been the most profitable LOB for retail banks for 50+ years - if not become more profitable by saving on marketing spend. AFAIK, no bank has ever attempted such a growth strategy.

Any idea why?

I thought finally here's a product that would disrupt credit card - until I read the part about Point costing $49 per year.

The same people who gladly fork out that kinda money for Doordash delivery or Spotify subscription seem to cry hoarse about hidden costs when it comes to paying anything to banks. The public outcry over Overdraft Protection Fees in USA is Exhibit A of that quirk of consumer behavior.

Which is why Fintechs entered the market with the promise of democratizing financial services by eliminating fees. Examples include Chimes, Klarnas and Robinhoods who offer free checking accounts, free overdraft, free loans and free trading accounts. Going by their blockbuster success, that strategy seems to be working very well. 

Only time will tell how Point's strategy of going in exactly the opposite direction will work out.

I've been clamoring for Confirmation of Payee for at least 8 years. 

Five Ways to Stimulate Electronic Payments

For a while, I was wondering if CoP had done a "Waiting for Godot" act. Nice to know it's finally around the corner.