BNPL turmoil in Australia: a cautionary tale or a one-off?

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Hello there,

Hope you’re doing well as another wave of Covid-19 spreads across the world.

While I was doing some research on the buy now, pay later segment in India late last year, I found that people here were even ordering food online and buying market shares using BNPL products.

The data was astonishing: In the next four years, BNPL is expected to be a US$50 billion market in India compared to only US$3.5 billion now.

That’s why our fintech Big Story this week caught my attention. My colleague Melissa talks about how the impossible-to-ignore BNPL trend, which hit a record high in Australia in early 2021, is now seeing signs of waning in the country. The Land Down Under is one of the most mature BNPL markets in the world, with several listed players such as Afterpay, Zip, Splitit, Openpay, and Fatfish Group.

So is this the end of pure BNPL? Much like in India, BNPL is in its infancy stage in Southeast Asia, and it may go the way of Australia. But can BNPL players in the region avoid this downward trend? To find answers to these questions and more, read on.

— Samreen

THE BIG STORY
BNPL sours in Australia, but will SEA players buck the trend?

Image credit: Timmy Loen

Australian BNPL stocks have gone into a tailspin since February 2021 as the model’s defensibility, rising competition, and regulatory risks are called into question.

THE HOT TAKE
Singapore fintech firm iFast finally buys a bank

Here’s what happened:

• The Singapore Exchange-listed fintech firm intends to acquire 85% of BFC Bank, a full licensed UK bank.
• The acquisition is driven by a belief that banks operate at the “foundation layer” of the financial industry, and having direct access to this will allow iFast to innovate at a faster pace.
• The S$73 million deal values loss-making BFC at an above-average multiple.