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When Chime, Revolut, NuBank and other loss-making Neobanks are enjoying such frothy valuations, it's a shame to hear that Monzo is experiencing such existential threats. 

TY @GabrielOnyango for the clarification but can you say for sure that Klarna uses illlion data outside of Australia?

As you can see from this screenshot, when I tried to register and get a free credit report, illion insisted on Proof of ID and Address in Australia.

This is not the first time a random new kid on the block is claiming that an incumbent 800 lb chimpanzee is inferior and that it will kill it, yada yada yada. Not saying Flinks can't disrupt / make a dent on Plaid but it's highly unlikely to happen via superior data quality. From what I know, data quality does not matter as much in the present days of credit decisioning via AI / ML compared to Rules as in the past.

Once upon a time, people looked at house prices and compared it with their bank balance and concluded that they could not afford the house and decided to stay on rent. Then banks came along and offered mortgages, which made it possible for the same people to buy homes. However, mortgages also introduced the risk of losing the home in future if the homeowner lost their job or were unable to make their mortgage payments for whatever reason. To that extent, mortgages did not really make houses affordable but simply kicked the unaffordability can down the road. But, despite that, mortgages are mainstream today. So will BNPL.

IMO, affordability is a moving target. What is unaffordable today can be packaged as affordable tomorrow by a financial product that's backed with adequate marketing and lobbying. BNPL is just the flavor of the season but it's not the only such financial product. AFAIK, there's no consistent legal definition of affordability across all situations. 

Some people celebrate such financial products as Financial Inclusion, Democratization, GDP Booster, etc. Some others diss them for creating Debt Trap. Choose your poison.

That said, like Mortgage, Credit Card and other credit products, BNPL will be subject to regulation in the forseeable future. My prediction about BNPL loyalty program came true faster than I expected. Let's see what happens to this one!

Nice post!

Earlier this month, I made a bold prediction that BNPL providers will launch a loyalty program. I didn't expect my prediction to come true so soon via Vibe from Klarna!

On a side note, I don't understand the concern about BNPL leading to people buying "products they don’t even need." It's not a secret that around 30% of GDP of capitalism / developed nations comes from discretionary goods aka products that people don't need. As Martin Kihn of Gartner put it aptly, "Capitalism requires the construction of needs that do not naturally occur". IMO, by fueling purchase of discretionary goods, BNPL is performing the yeoman service of keeping the lights of capitalism on!

Memory serves, MasterCard had launched an A2A payment product in the past called PayByBank or PayWithBank. Wonder if PayFromBank will fare any better. To a large extent, in markets that have high credit card and POS penetration, A2A is a solution seeking a problem from Consumers / Payers pov. If regulators don't cap MDR for it, A2A might not be the panacea for Credit Card MDR evil that Merchants might expect either.

It's (Ron) Shevlin, not Shelvin:)

It was right in your first citation.

Matt Levine recently commented that one of the big problems in finance is that bankers become bankers because they don't like reading. Daloopa indeed solves a big problem in the industry. I first heard about Daloopa from its sponsored ads in Byrne Hobart's newsletter, from which I also learned that 80% of the time spent by financial analysts goes towards manually extracting qualitative and quantitative data from statutory filings of companies and other long PDF reports. May Daloopa give the Dr. Michael Burry advantage to everyone in finance. (For the uninitiated, Dr. MB is one of the big shorts featured in Michael Lewis's eponymous book, whose secret sauce was his ability to pore through long winding reports and spot gotchas that most other financial analysts miss).

Fine thanks...

Lame protests about BNPL. Consumers should take responsibility for their actions. If banks and fintechs don't give credit, they will be accused of elitism. If they do give credit, they will be accused of irresponsible lending. End of the day, democratizing credit via BNPL, secured credit card etc. are net positive for GDP. 

In "accusing the *firms* of violating data storage rules", did you mean MasterCard, in which case the plural "firms" is a typo OR did you mean Issuer Banks, in which case the plural is correct?

This is a non-trivial question since, AFAIK, MasterCard does not sell or onboard new customers of its debit card and credit card, only Issuer Banks do. A ban on adding new customers would mean MasterCard can't sign up any more Issuer Banks for its cards. IMO, that's not such a big deal given that all Issuer Banks that wanted to issue MasterCard have already done so.

If RBI outlawed all existing MasterCard debit cards and credit cards, that could move the needle on MasterCard's compliance of said law.