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A Summary of

The Checkout as a Territory

Mario Gabriele
The Generalist
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The new category of financial services is "Buy Now, Pay Later" (BNPL).

How BNPL works

  • BNPL often offer services at 0% interest, immediate access to the product, and cap late-fees.
  • BNPL businesses earn revenue from merchants (single digit percentage of order value to BNPL provider).

BNPL vs Credit Cards

  • BNPL is viewed as less risky than credit cards.
  • Downside of BNPL is that users cannot build their credit score.
  • To win at checkout experiences BNPL businesses need to move upstream.
  • BNPL providers are not just financial businesses, but behavioral ones, architecting the checkout experience to increase purchasing. Companies like Affirm, Afterpay, and Klarna are hastening the decline of credit cards and ushering in pseudo-subscription purchasing which softens costs and limits defaults.
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