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Providers Buy Now and Pay Later Reveal Millions of Losses

Slow sales growth, millions of losses, and tighter regulation can bring bad news to the controversial sector.

Australia buys now, later paying providers have been hit in the stock market, stocks have plummeted by an average of 80%, the sector has lost millions of dollars, and consumer interest in products has plummeted. ..

Investors are struggling to sell stocks that are nearly 12% cheaper in a single trading session.

The Australian market is saturated with BNPL providers with 12 listed on the Australian Stock Exchange. This is the most common place in the world.

Afterpay Loss of $ 156.3 million Last year’s fiscal year increased by almost 700% compared to last year.

Rival BNPL Service Zip also reported a loss of $ 652 million. This is a significant increase of 3000% compared to last year when it announced a $ 20 million deficit.

Grant Harverson, CEO of McLean Roche Consulting, said many were shocked by the dramatic loss of Zip.

“The sector lost more than $ 1.05 billion in 2021 and many investors are concerned,” he said. Parents..

“The 2021 reports for most BNPL apps were bad because of lower sales growth, higher credit losses and higher cash burns. From a cash flow perspective, that number seems questionable. . “

Consumer group has BNPL service “Debt Spiral” for People As with other financial products such as credit cards, the industry is required to be more tightly regulated and is already struggling.

Catherine Temple, head of policy and campaigns at the Center for Consumer Behavior Law, previously pointed out that if young people rely on BNPL services, they can have problems.

“Buy now and pay later providers normalize the debt of really young Australians at the beginning of financial independence, and the decisions we make when young are really long-term to our future money. It can have an impact, “she said.

“In general, you need to know that this product isn’t free, especially if you can’t pay on time and are prone to problems.”

Meanwhile, Zip stocks plummeted 63% from highs, but another provider, Openpay, has pushed into the US and UK markets, which could fall if more money isn’t raised or new stocks aren’t available. He warned that he had sex and accumulated a lot of bad debts. Published by the accounting firm PricewaterhouseCoopers.

According to Halberson, lesser-known players such as IOUpay experienced a dramatic 96% drop from the peak, while another player called Fatfish fell 84%.

To join the already fierce competition Payment giant PayPal Earlier this year, it announced that it would enter the field by offering BNPL to 9 million Australian customers, but said it would not charge late fees.

The Reserve Bank of Australia (RBA) has also flagged a change in rules that will allow retailers to pass on the fees charged by BNPL providers to their customers, as it could exacerbate the problem in this sector. , May significantly reduce the attractiveness of payment options.

Halberson also said that RBA figures show that BNPL spending is flat and annual sales are $ 11.5 billion, which could have already peaked in Australia. Suggests.

Initially published as follows Providers Buy Now and Pay Later Reveal Millions of Losses

Providers Buy Now and Pay Later Reveal Millions of Losses

Source link Providers Buy Now and Pay Later Reveal Millions of Losses

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