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

[Joules MM1]

Jack Dorsey leads blockbuster $29 bn buyout of Australian BNPL giant Afterpay

The takeover underscores the popularity of a business model that has upended consumer credit by charging merchants a fee to offer small point-of-sale loans

www.livemint.com

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]

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.

 

[Greynomad99]

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.

 

[wayneL]

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?

Buy now, pay later providers take a beating

Australian buy now, pay later providers have taken a beating on the stock market with shares plunging on average 80 per cent with the sector losing millions and a reported dive in consumer interest in the product.

www.news.com.au

 

[Smurf1976]

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.

 

[Greynomad99]

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]

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]

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.

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.

 

[Greynomad99]

It's looking more and more like BNPL's best days are behind them with ever louder demands from debt consultants clamouring for their regulation. Z1P's chart mirrors the glide path of a brick and even APT is getting the wobbles with its acquirer, Square, having its price collapse as well.
On a more positive note I'd expect Z1P to have hit bottom (or close to it) as several charting techniques/theories show $4.10 - $4.60 to be the theoretical range for the low, with $4.20 the most probable. For anyone still holding on to this stock I hope that proves true.

 

[Rabbithop]

It's looking more and more like BNPL's best days are behind them with ever louder demands from debt consultants clamouring for their regulation. Z1P's chart mirrors the glide path of a brick and even APT is getting the wobbles with its acquirer, Square, having its price collapse as well.
On a more positive note I'd expect Z1P to have hit bottom (or close to it) as several charting techniques/theories show $4.10 - $4.60 to be the theoretical range for the low, with $4.20 the most probable. For anyone still holding on to this stock I hope that proves true.

Good morning GN. I took an interest on BNPL running up the hill more than a yr ago but didn't venture into it. Kept an eye for ZIP sp to dip for $5 entry, which I did for a sm amt. Currently outstanding to add another 1k if it falls to 3 plus or shld I retreat in this skidding?

 

[Rabbithop]

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.

Just like GN, from the same old classroom.
Once every fortnight we may indulge to have lunch out. Lunch is always cheaper than Dinner even with a glass or two to go with the meals. Not thoroughly broke yet but like to bear in mind... Retired life is meant for Relaxing n Enjoying it while we still have the moolah, health, mind and legs ability to walk ...there will be plenty of time to sit in Nursing Home waiting for visitor, if you are lucky or you could be lying in bed 24hrs a day waiting for someone kind enough to assist you with a sip of that precious liquid water sitting on your bedside table, only your eyes could see n your throat is crying dry for it.

 

[Rabbithop]

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.

It comes with an added cost on top.
Recalling those lay by....always Good to teach poor financier to be PATIENCE.
A form of saving, putting aside a small amt n in the end you get your reward.

 

[Value Collector]

Just like GN, from the same old classroom.
Once every fortnight we may indulge to have lunch out. Lunch is always cheaper than Dinner even with a glass or two to go with the meals. Not thoroughly broke yet but like to bear in mind... Retired life is meant for Relaxing n Enjoying it while we still have the moolah, health, mind and legs ability to walk ...there will be plenty of time to sit in Nursing Home waiting for visitor, if you are lucky or you could be lying in bed 24hrs a day waiting for someone kind enough to assist you with a sip of that precious liquid water sitting on your bedside table, only your eyes could see n your throat is crying dry for it.

Exactly your retirement is broken up into three stages.

1. Go Go years (early years of retirement)
2, Go slow years (mid retirement)
3, No Go years (late stages of life)

There is not much point saving all your money for your no go years when all you want to do is sit at home watching TV.

You should front load your spending into your GO Go years where you can do more activities that you can’t do later in life.

( I recently read a book called Die with Zero, it’s changed my perspective on money, I highly recommend)

 

[Rabbithop]

Exactly your retirement is broken up into three stages.

1. Go Go years (early years of retirement)
2, Go slow years (mid retirement)
3, No Go years (late stages of life)

There is not much point saving all your money for your no go years when all you want to do is sit at home watching TV.

You should front load your spending into your GO Go years where you can do more activities that you can’t do later in life.

( I recently read a book called Die with Zero, it’s changed my perspective on money, I highly recommend)

Currently in no 2 but still hanging on to no1. Have to had a good laughs at ourselves...threw a home cooked lunch spread at home to catch up with friends f2f, only 10 of us. It ended at 5pm took an hr of cleaning up as soon as we sat down to watch 6pm news, we were falling asleep. Good decision to lock up, lights out, in bed at 7pm...that's retired life...what's the author name

 

[Value Collector]

Currently in no 2 but still hanging on to no1. Have to had a good laughs at ourselves...threw a home cooked lunch spread at home to catch up with friends f2f, only 10 of us. It ended at 5pm took an hr of cleaning up as soon as we sat down to watch 6pm news, we were falling asleep. Good decision to lock up, lights out, in bed at 7pm...that's retired life...what's the author name

Author- Bill Perkins
Title - Die With Zero

 

[sptrawler]

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.

There is a reason Australia's savings are up $230b over the pandemic period, people had to stay home and cook etc.lol

 

[Craton]

From my post in GG Dogs of Dec 2021 thread. Would someone be able to get me a quick reply?

BNPL and am not a stock holder or user of.
So with the holiday season shopping spree soon to be fever pitch, heard on the ABC radio today that many ppl have multiple BNPL accounts and thus, are in debt crisis.
E.g. one woman, on the pension, has eight of said accounts and has amassed $2.5k in monthly late fees. Ouch!
Just wondering what provisions the BNPL companies have in place for debt defaults, recovery and write offs etc?

 

[Rabbithop]

From my post in GG Dogs of Dec 2021 thread. Would someone be able to get me a quick reply?

That's the reason I am not keen on those type of stock, still dip in 1k on ZIP to test the water. Lots of ple esp the young ones to get fast money to have things NOW n why worry about the small monthly fee, they never think it will add up.

 

[sptrawler]

From my post in GG Dogs of Dec 2021 thread. Would someone be able to get me a quick reply?

Yep it wasn't as though we on here said as much, as soon as BNPL came out, just another way for people to spend money they don't have.
It just show what a bloody fiasco the banking royal Commission was, ASIC slams the banks for irresponsible lending and waves through BNPL, go figure, obviously common sense isn't a pre requisite in ASIC IMO.

 

[divs4ever]

Exactly your retirement is broken up into three stages.

1. Go Go years (early years of retirement)
2, Go slow years (mid retirement)
3, No Go years (late stages of life)

There is not much point saving all your money for your no go years when all you want to do is sit at home watching TV.

You should front load your spending into your GO Go years where you can do more activities that you can’t do later in life.

( I recently read a book called Die with Zero, it’s changed my perspective on money, I highly recommend)

sorry i went straight to stage 3 , but hope to go back and test out stages to 2 and 1 in the future ( for a visit )

BTW i did a LOT in the first 60 years

so for stage 1 where would i go ( that i haven't already been ) i had 45 years to buy a new car .. and didn't , unless i migrate i have no long range travel plans , currently

avoid TV like the plague , and have ad-blockers to filter the noise on the internet ( so less inspiration to shop )
stage 3 isn't so bad the main challenge is a sensible place to park the cash , in case stage 3 ( for me ) lasts longer than predicted ( and the savings get mauled by inflation )