Buy now, pay later, the party is officially over
While there may be value in BNPL as a provider of targeted marketing leads to traders, it remains unclear how this competitive advantage can be transformed into a sustainable and profitable model for the BNPL sector. The 78 percent drop in the value of Sezzle since then and Zip announcing their merger on February 28 helps explain why the deal fell through. Whatever gains from the scale and cost-cutting deal on offer – $130 million in total synergies – appear to have been overshadowed by growing concerns about bad debts in the BNPL sector, as questionable credit risk management in the business collides with rising interest rates, falling consumer spending. and slower economic growth, especially in the US market which is the target of most of the BNPL group. Shares of Sezzle immediately fell 35 percent after the deal’s termination was announced, with Zip up 4 percent. The end of the merger leaves the obvious question of how will these two businesses survive on their own? Consolidation do