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There is a big shift in how young consumers spend and access credit these days, which has led to a boom in the BNPL space. In fact, the BNPL model is fast evolving as consumers increasingly seek greater choice and flexibility in the way they make payments when shopping online or in-store. The rapidly growing BNPL marketplace is benefiting major players like $Affirm Holdings (AFRM.US)$, $Afterpay Ltd. (AFTPF.US)$, $PayPal (PYPL.US)$ and those making a foray into the BNPL market such as $Apple (AAPL.US)$, $MasterCard (MA.US)$, $Shopify (SHOP.US)$, $Block (SQ.US)$, $Visa (V.US)$. While BNPL offers are normally interest free, consumers may not always be getting a good deal. Borrowing money does not come without consequences. BNPL plans would normally be used for wants rather than needs. It becomes more challenging for consumers to monitor their spending carefully or to stick closely to their monthly budget to remain on track with their goals. BNPL options tend to promote impulsive spending which could entice consumers to take on more debts. There could even be penalty fee or interest should they default on their payments. While BNPL appears very tempting for consumers, the risks involved are very real. For the sake of their financial health, it may be wiser for consumers to save up first than to buy what they want first without saving for it. This applies to investment as well. On the surface, using leverage may seem appealing with huge returns. It is never a good idea to overdo it with borrowing money. The greater the leverage, the larger the returns may be, but the losses can be higher as well. The use of leverage tends to make the returns more volatile and thus harder for average investors to stomach the risks involved. Using leverage could lead to a higher chance of success for those who are knowledgeable about the stocks they invest in and have a higher risk tolerance.
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BNLP is just another way of them getting people to sign up for their system where you own nothing but you’re happy. The only thing is somebody owns it which
means if they tell you do something, you cant say no or they take away your access to that stuff. BNLP used in the market would be loansharking. Thats what destroys markets. When hedge funds get over leveraged and a margin call happens all their shares are then sold off and the last one to make a claim usually gets nothing and takes the loss. Debt is the worst idea now that most people dont have any dignity or respect for themselves. You cant let anyone borrow money anymore because selfishness is rampant. They would buy themselves more needless stuff than pay someone back that out of the goodness of their heart let them borrow during tough times. How about adding things to society to encourage better behavior instead of encouraging it by making it easier to access
means if they tell you do something, you cant say no or they take away your access to that stuff. BNLP used in the market would be loansharking. Thats what destroys markets. When hedge funds get over leveraged and a margin call happens all their shares are then sold off and the last one to make a claim usually gets nothing and takes the loss. Debt is the worst idea now that most people dont have any dignity or respect for themselves. You cant let anyone borrow money anymore because selfishness is rampant. They would buy themselves more needless stuff than pay someone back that out of the goodness of their heart let them borrow during tough times. How about adding things to society to encourage better behavior instead of encouraging it by making it easier to access
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Theoretically, this concept sounds interesting. It is a recipe for an investor to simultaneously flex his capital to buy more varieties of shares and pay later by installment. Likewise, is the
concept of leveraging investment. Having said that, how wise is this approach for an investor? Once an investor borrow to trade, he must remember that trading is never ever predicable. He must be mentally prepared that he may not have a Bullish outcome, and thus has he enough means to return a 100% of what he has purchased even by installment. It is indeed of a great challenge and in no way a mean feat to achieve.
concept of leveraging investment. Having said that, how wise is this approach for an investor? Once an investor borrow to trade, he must remember that trading is never ever predicable. He must be mentally prepared that he may not have a Bullish outcome, and thus has he enough means to return a 100% of what he has purchased even by installment. It is indeed of a great challenge and in no way a mean feat to achieve.
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Buy Now, Pay Later is actually an old product with a new design. It is very well marketed. BNPL also adapted to the demands of young consumers ( particularly Gen Z ) and technology.
There are certain degree of risks for young consumers but mostly these young consumers need to be aware of how much they are spending whilst managing their finances wisely and prudently.
Q) Can we apply BNPL concept to investing?
A) Definitely, why not? Overall, it’s a great innovation that requires some thought from policy makers to ensure young consumers and the community are adequately protected from the risks of excessive credit.
There are certain degree of risks for young consumers but mostly these young consumers need to be aware of how much they are spending whilst managing their finances wisely and prudently.
Q) Can we apply BNPL concept to investing?
A) Definitely, why not? Overall, it’s a great innovation that requires some thought from policy makers to ensure young consumers and the community are adequately protected from the risks of excessive credit.
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BNPL is not only a consumer financial product, but also a mobile payment method, as well as a new type of consumer platform that has a higher efficiency and a better experience.
In Europe and the United States, credit card transactions are still the mainstream of the payment market, and mobile payment is in a secondary position. But for millennials/Generation Z young people, they generally understand and welcome mobile payments. At the same time, many of them don't have credit cards, and many hold cards but don't like traditional credit card services.
From the perspective of merchants, in the context of the continuous impact of the new crown epidemic on the global economy, buying first and paying later has brought new traffic, and increased the conversion rate and customer unit price, thus injecting new vitality into retail transactions.
In fact, merchants need to pay 4% to 5% of fees to BNPL companies-higher than the 2% transaction fees they pay to credit card companies. But they are still willing to do so, because the BNPL service does help them acquire new customers.
Therefore, it can be said that the buy-after-pay platform meets the needs of B and C at the same time.
In Europe and the United States, credit card transactions are still the mainstream of the payment market, and mobile payment is in a secondary position. But for millennials/Generation Z young people, they generally understand and welcome mobile payments. At the same time, many of them don't have credit cards, and many hold cards but don't like traditional credit card services.
From the perspective of merchants, in the context of the continuous impact of the new crown epidemic on the global economy, buying first and paying later has brought new traffic, and increased the conversion rate and customer unit price, thus injecting new vitality into retail transactions.
In fact, merchants need to pay 4% to 5% of fees to BNPL companies-higher than the 2% transaction fees they pay to credit card companies. But they are still willing to do so, because the BNPL service does help them acquire new customers.
Therefore, it can be said that the buy-after-pay platform meets the needs of B and C at the same time.
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$Affirm Holdings (AFRM.US)$ went public on the US stock market in January this year. The company will announce its latest quarterly results on September 9. Last quarter it achieved revenue of US$231 million, an increase of 67% year-on-year; the number of customers increased by 60% year-on-year to 5.4 million; the total transaction volume on the platform increased by 83% year-on-year to 22.57 One hundred million U.S. dollars.
Affirm has established cooperation with more than 12,000 merchants, including Peloton, Wal-Mart, and Shopify. On Friday, August 29th, Amazon announced its cooperation with Affirm to provide users with an installment payment option for the first time. Affirm's stock price soared by more than 35% after the day's news was released
Affirm has established cooperation with more than 12,000 merchants, including Peloton, Wal-Mart, and Shopify. On Friday, August 29th, Amazon announced its cooperation with Affirm to provide users with an installment payment option for the first time. Affirm's stock price soared by more than 35% after the day's news was released
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The abbreviations simply mean "buy now, pay later" in installment. BNPL is well recognised globally, and is certainly not new in the market. Such purchases can be sold anywhere globally. Right now the Giant companies like FAVE, $PayPal (PYPL.US)$ and $ Apple (AAPL.US)$ are making thriving business by providing the BNPL platform. More so with Covid 19 and the Delta variant pandemic, which further accelerates the trend of buying on-line. This concept of BNPL is gaining popularity among the savvy shoppers, especially among the (Gen Z) group. The allure of this platform are:
1) BNPL provides customers a ready payment minus the use of cash or credit card.
2) Customers are permitted to stagger out their payments in affordable stages.
3) As opposed to credit card payment which need to be settled the following month, BNPL allows the flexibility of a stipulated payment period.
4) If well managed, consumers find BNPL offers a smaller manageable repayments with no interest or hidden fees incurred.
5) It also provides consumers instant assess to the purchased products with no messy account set-up.
The weak link is of course the use of BNPL is hazardous to a consumer who lacks self-discipline to budget his expenses.
Having set aside the pros and cons of the BNPL service, we come to face the question of whether this concept can be applied to leveraging investment? In truth, it is Risky to buy shares and pay later. This trading strategy requires extremely shrewd and vigilant monitoring by the investor to his wealth wallet, in order to ensure profits. Otherwise, he can easily fall into a vicious cycle of debt.
1) BNPL provides customers a ready payment minus the use of cash or credit card.
2) Customers are permitted to stagger out their payments in affordable stages.
3) As opposed to credit card payment which need to be settled the following month, BNPL allows the flexibility of a stipulated payment period.
4) If well managed, consumers find BNPL offers a smaller manageable repayments with no interest or hidden fees incurred.
5) It also provides consumers instant assess to the purchased products with no messy account set-up.
The weak link is of course the use of BNPL is hazardous to a consumer who lacks self-discipline to budget his expenses.
Having set aside the pros and cons of the BNPL service, we come to face the question of whether this concept can be applied to leveraging investment? In truth, it is Risky to buy shares and pay later. This trading strategy requires extremely shrewd and vigilant monitoring by the investor to his wealth wallet, in order to ensure profits. Otherwise, he can easily fall into a vicious cycle of debt.
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In the past people have already started the so called BNPL term. Now it’s jus the new Gen trying to utilise it in another way similar to credit cards system. The Charg-It system, created by John.C Biggins of Flatbush National Bank of Brooklyn 1946 created a card called “Charg-It” which allows people within a two square block radius charge purchase from multiple vendors to the bank. In 1950’s Frank McNamara & business partner Ralph Schneider introduced the first Diners Club card to gain widespread popularity. So to me it’s jus another source and way to make to money goes round. It will indeed be risky and also gain popularity in the younger Gens to use first and pay later but to make it happen terms and conditions do need to be abide to.
$PayPal (PYPL.US)$
$PayPal (PYPL.US)$
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$Affirm Holdings (AFRM.US)$ $PayPal (PYPL.US)$ $Amazon (AMZN.US)$ the buy-now-pay-later market is red-hot right now. Following Sqaure’s acquisition of Afterpay for $29 billion and Amazon partnering up with Affirm to offer BNPL on Amazon, PayPal is now stepping into the arena by acquiring Japanese BNPL firm Paidy for $2.7 billion
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$PayPal (PYPL.US)$
PayPal Holdings said it would acquire Japanese buy now, pay later (BNPL) firm Paidy in a $2.7 billion largely cash deal.
PayPal also entered Australia last year, raising the stakes for smaller companies such as Sezzle and Zip Co.
The transaction is expected to close in the fourth quarter of 2021, and will be minimally dilutive to PayPal's adjusted earnings per share in 2022.
Paypal continue to expand the acquisition mode by boosting up the moat to against other fintech companies. Buy now pay later will be a hot future trend so paypal immediately expanding the market share in this area. It proved after the separation from ebay, paypal can continue to grow the revenue and stay on top as a fintech leader.
PayPal Holdings said it would acquire Japanese buy now, pay later (BNPL) firm Paidy in a $2.7 billion largely cash deal.
PayPal also entered Australia last year, raising the stakes for smaller companies such as Sezzle and Zip Co.
The transaction is expected to close in the fourth quarter of 2021, and will be minimally dilutive to PayPal's adjusted earnings per share in 2022.
Paypal continue to expand the acquisition mode by boosting up the moat to against other fintech companies. Buy now pay later will be a hot future trend so paypal immediately expanding the market share in this area. It proved after the separation from ebay, paypal can continue to grow the revenue and stay on top as a fintech leader.
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jasonleett : Fundamentally... It's buying on credit... Without a card...
So long consumers exercise prudence in using BNPL options, and do not accumulate unnecessary debt from their purchases, it is, nevertheless, the trend of today's consumerism.
Ultimately the onus is on its users, to weigh the pros and cons of using such leverage, and being prepared for any financial crisis that can put unecessary pressure with debt repayment.
101767718 : Great Sharing on BNPL
HopeAlways OP jasonleett : Indeed, the risk and reward have to be carefully understood.
102089245 : Good advice. BNPL has to be used cautiously so as not to fall into a vicious cycle of debt.
HuatEver : Very well explained. Thanks.
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