Quote Originally Posted by Ogg View Post
There's some truth to this. However, it's unknown weather this will play out in the long term. Merchants like myself do like it, however, it comes with a 6% fee, which is expensive. The "increases revenue" argument is valid, but there hasn't been any large third party studies to confirm this is true. I joined because I wanted to keep up with the latest technology and trends online. At the beginning there was lots of buzz around the "buy now pay later" model and having Afterpay available on your site was seen as a status symbol. Now the buzz has died down and I don't see it as important.

I feel like customers maybe experiencing the same 'hangover effect'. Do customers really love Afterpay? Maybe. But I suspect a lot of the hype has gone and only a very small percentage of users are continuing to use the service regularly. This is my main argument, and Afterpay maybe trying to hide this by only reporting certain statistics and chasing after new growth to replace end users.
I see the overall system working as such that a certain percentage (say 10 to 20%) of consumers will always want to spread the cost with installments. However the more overall merchants that have now implemented it, the less special it is, and the less likely these consumers will seek you out to buy from you. Assuming overall consumer discretionary spending is limited at a fixed amount, it turns from an advantage having it in the beginning, to potentially just a disadvantage of not having it once it is ubiquitous. Genius really.


Quote Originally Posted by Ogg View Post
Afterpay's brand is very strong. This is the reason why it's value is so high. However outside of Australia it's a different story. There's lots of competitors now. However, it does seem like they're doing well.

My main attack isn't on Afterpay but on the industry itself. Afterpay just happens to be the largest and most valued.

Basically, I'm saying this industry is going through the same thing as the Groupon trend experienced in the early 2010's. It's impact was over estimated and a bubble was formed. Consumers like new things but they're fickle and aren't loyal in the long term. Time will tell.
I remember the Groupon mania, fueled by a massive amount of unprofitable advertising spend to capture emails, to then spam them deals until they eventually got annoyed, unsubscribed & churned off. Groupon merchants also got frustrated making no money serving low value customers who likely never came back. The model was flawed to begin with.

I do agree that the valuations for the BNPL companies on the ASX look extremely bubbley. And when the likes of Splitit (Israeli) and Sezzle (American) come to list exclusively on the ASX and not the NASDAQ, you can't not help but get concerned and want to run for the exits. But overall I lean towards this being a sustaining paradigm shift, and not just a fad. And currently it's a merchant land grab that is playing out.

As a long term investor, I think I've backed the right horse, and am content on riding it out, even during the times it'll look to be massively overvalued, and the times it'll look to be undervalued (assuming the overall thesis remains intact.) But you're right time will tell!