Thread by @trengriffin

1/ "Credit cards are a Neanderthal version of what really needs to happen...much more consumer transparency, much more consumer control, [a] really clear sense for what things cost, and when you’re done paying for them, even if you are paying over time." news.google.com/articles/CAIiE…

2/ "What we focus on is making sure that it’s really, really, really clear to you as you decide to use Affirm what the costs will be, what the term will be, that there are no late fees, that you don’t need to be scared about missing a payment. It’s our job to remind you."

3/ The consumer credit value chain is impacted by "buy now pay later." How much revenue is lost by other lenders? How much less do borrowers pay? Is there an underwriting arbitrage? Is scale a competitive advantage for "buy now pay later" providers?
newyorkfed.org/medialibrary/i…

4/ "Late payment fee: In most cases, you'll be hit with a late payment fee. This fee is often up to $40.
Penalty APR: A late payment can cause your interest rate to spike significantly higher than your regular purchase APR." google.com/amp/s/www.cnbc…

5/ "Apple is stepping in between the bank and a customer. Everyone wants to own the customer, the distribution/network return is more valuable. As Afterpay has shown, providing a slick app-based payment service can be a way to pinch customers from banks." google.com/amp/s/amp.smh.…

6/ "Whenever a payment goes through Apple Pay, Apple takes an undisclosed fee for providing the hardware that turns phones into wallets. Google’s digital wallet doesn’t charge a fee for doing this, but unlike Apple, it does use consumer data for its business."

7/ "Companies such as Square can use a firm’s payments data to assess creditworthiness. If you’ve got the payments data, you’ve probably got the best data there is on the borrower."

8/ "Accenture estimated in 2019 that new entrants to the payments market had amassed 8% of revenues globally - and that share has risen over the past year as the pandemic boosted digital payments and hit traditional payments" reuters.com/article/busine…

Albanian army attack:

"embedded finance is a fancy term for companies integrating software to offer financial services. So far this year, investors have poured $4.25 billion into embedded finance startups, almost three times the amount in 2020, data provided by PitchBook shows."

10/ BNPL can benefit merchants and consumers.

To paraphrase a Jeff Bezos quote:

"The margins credit cards derive from the revolving credit business are BPNL's opportunity."

BNPL charges merchants commissions but end customers and merchants see value. leadgence.com/growing-smb-bu…

11/ To paraphrase Huey Lewis: Is it hip to be Square?

"Afterpay also assists merchants in growing their businesses by helping to drive repeat purchases, increase average transaction sizes, and provide their buyers with the ability to pay over time." squareup.com/us/en/press/sq…

12/ To paraphrase Jim Barksdale:

"In the financial services business, there are two ways to make money. You can bundle, or you can unbundle.”

Some BNPL vendors are cross-selling other services to end customers to generate better unit economics. google.com/amp/s/25iq.com…