A moment of silence. Longtrepreneur pays tribute to the 2 Million precious souls that lost their lives in a senseless battle – during WWII’s “Battle of Stalingrad.”
This article is not to remind anyone of the bloody war which caused such havoc on the world. Instead, it reinforces the argument about the losses investors endured in the BNPL sector of the market.
The founders and investors saw a lucrative opportunity to disrupt the credit card market, which the banks and credit card companies dominate. The BNPL market suddenly took off, touting a better way to finance one’s financial needs.
Big names in the annals of venture capital poured billions of dollars into the BNPL sector, thinking that this new finance phenomenon would make credit cards obsolete and open a whole new category of financial services.
In hindsight, though. The BNPL model may be a good business model to chase. However, it may have once been rosier.
Afterpay, Klarna, Affirm, and their counterparts have lost more than 50% of their market value during the down economy.
The BNPL is also not prudent to finance one’s necessities as it promotes “instant gratification.” The fiscal responsibility doctrine dictates that you should not spend money you don’t have.
The BNPL flies in the face of ‘financial sanity’ because this BNPL is overstimulating an overly-stimulated consumer who does not need to buy things they want and do not need.
