Mr Halverson previously warned that this year could bring more poor performance in the BNPL sector as balance sheets and cash flows weaken. Meanwhile Zip, had more than $431 million in available credit to back transactions and expects another $200 million facility to become available by the end of September.īut disturbingly, many of the smaller players had just eight to 10 months worth of funding before they would run out of cash. It made up the difference through borrowings and raising cash by issuing more shares while prices were surging, the newspaper noted. In its last full year as a stand-alone company, Afterpay burnt $571 million worth of cash from its core operations and in the past three years nearly $1 billion went out the door, reported The Australian. Rate rises are also expected to drain providers of much-needed cash at a quicker rate as many are propped up with lines of credit. Zip also reported a $652 million loss last financial year, a whopping 3000 per cent increase on last year. ![]() “The reality is the BNPL provider’s bad debts are astronomical, none of them have made a profit, none of them have paid a divided and share prices are down 70 to 80 to even 90 per cent in some cases.” “They are very good at marketing spin and PR, good at using the services of highly paid consultants to get around the Consumer Credit Act and are able to offer credit without it appearing as credit,” he told. Payments expert Brad Kelly, managing director of Payment Services, said the sector is in for a tough time, despite providers pointing to turbocharged growth and numbers. There are 12 BNPL providers listed on the Australian Stock Exchange – the most anywhere in the world – and the overcrowded market is forecast to undergo a major shake-up this year. The buy now, pay later (BNPL) sector is valued at more than $30 billion collectively, but currently the Australian market is saturated. Experts have predicted potential “carnage” for the buy now, pay later sector as providers burn through cash, bad debts balloon and customers retreat from using the service – a model which they say isn’t sustainable.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |