One of the marvels of buy now, pay later (BNPL) is being able to buy certain dark necessities when you need them. Like tickets to the Red Hot Chili Peppers the second they go on sale, instead of waiting for payday and missing out on the best spot (the mosh pit, obvs). 🌶️ But behind the scenes the BNPL industry is in chaos.

It turns out it can be hard to stand out in the business of instalment payments, and the crowded market is leaving a trail of scar tissue. Other problems are also piling up around the world. Rising interest rates, slowing spending, a sharp rise in people missing repayments and Gen Z’s spiralling debt have all been taking bites out of lenders. Late payments can be a source of revenue for lenders that charge penalty fees, but too many missed payments and bad debts can swamp companies. 🌊

Shares in US lender Affirm (AFRM) have tumbled 76% this year. Australian listed lender Sezzle has fizzled, with their share price losing 93% of their value. Closer to home, Laybuy Holdings has lost 81% of their market valuation this year and is reportedly hunting for more cash to stay afloat after growing losses. It’s enough to drive the industry to drink. Unfortunately, a trip to the bottle shop and an offer of in-store booze financing hasn’t gone down well at all, inviting regulators to start circling the waters like sharks. 🦈 Gulp! 

Was it all a bubble? Some think so. It was certainly a boom at a time when market conditions were favourable. With low interest rates, a surge in consumer spending and monster estimates of US$7.2 trillion in BNPL transactions by 2025, there was a lot of excitement from companies eager to get involved. But, for now, it feels unlikely that BNPL will disappear under the bridge completely any time soon. 🌉