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The summer of Buy Now Pay Later


This week in fintech

August 10 · Issue #68 · View online

A weekly summary of the latest news in our world of finance, design, and technology.

  • 🎖 Every company becomes a fintech
  • 🚰 Money pouring into fintech
  • 💸 How to get rid of a billion dollars

We’re back again after a fantastic Norwegian summer! Sadly a couple of you reported that the newsletter before the summer was added to spam. Likely because some of the headings were classic spam-bait. 😆🙈 If you want to avoid this going on, it could be wise to add this mail to your contact list so that it passes your spam filter.
How to get caught in a spam-filter 101 😆
How to get caught in a spam-filter 101 😆
Back to our regular programming:
🏝 The summer of Buy Now Pay Later
Square has acquired the Buy Now Pay Later company Afterpay for 29 billion dollars in an all-stock deal. But the deal is probably not about bringing Buy Now Pay Later into Square’s services. It’s probably more important bringing AfterPay’s merchant relationships into Square’s seller ecosystem and converting AfterPay’s existing customer base into Cash App users. Link
BNPL-companies have never been a real threat to banks, but last week Apple announced that they are joining forces with Goldman Sachs to offer a Buy Now Pay Later function within Apple Pay to iPhone users. This might not seem like big news, but this is potentially a larger threat to banks because of what it will do to the conscious thoughts of every single person who uses its BNPL: Apple is abstracting away banks. For the first time, you will credit a technology device and the company that made it for helping you move your money. 
What Apple have done is plant a seed — a seed of a question that will be watered millions of times a day by millions of people every time they pay with Apple’s BNPL product: ‘Why do I even need a bank at all?’
Vipps has seen Apple as the main threat for a long time. There is no secret that new payment solutions for online shopping will be an important topic around the table in Vipps management team this autumn. I wouldn’t be surprised if we see a Buy Now Pay Later solution from Vipps in the years to come since it is a feature that doesn’t directly compete with their owners.
Visa, on their side, also doesn’t want to miss out and has announced that they are developing installment solutions for their customers. Link
Timely enough, TikTok is fed up with all the advertisements for BNPL-companies and is banning advertising from them on their platform. This is going to be an exciting space to follow for the following years to come.
Mengxi Lu
Square buying Afterpay in all stock is the ultimate demonstration of how buy now pay later works
🎖 Every company becomes a fintech
Julian Lehr
The three laws of internet businesses:

① On a long-enough time horizon, every company becomes a chat app.

② On a long-enough time horizon, every company becomes an ad business.

③ On a long-enough time horizon, every company becomes a fintech.
🚰 Money pouring into fintech
One in every five dollars invested by venture capital this year has gone into fintech. No wonder when roughly one in five of the unicorns is a Fintech – more than any other sector. How did this happen? The fintechs are zeroing in on everything big banks aren’t. Scott Galloway is arguing that traditional banks have been too slow embracing innovation and that the business of money is ripe for disruption Link
While we’re talking about valuations: Revolut just raised a new round, valuing them to $33bn. Simon Taylor from 11:FS has written about the lofty valuation and that their best-in-class UX might be part of the answer. Link
Market cap vs profit compared
Market cap vs profit compared
The Swedish bank Nordax announced that they wanted to buy the consumer loan bank Bank Norwegian at the beginning of March. In July, they came with a new offer valuing Bank Norwegian to 19.61 billion NOK. The price DNB is paying for Sbanken? 11.6 billion NOK.
💸 How to get rid of a billion dollars
It’s nearly impossible to spend a billion dollars.“ I laughed at the ridiculousness of this statement, but he went on, doing the math in front of me to make his point. "The most expensive Gulfstream jet in the world is $65 million; a couple of very fancy houses will cost you $20 million, $30 million total; many of the highest-end cars are only a few hundred thousand dollars each. You’ve done all that and you’ve still got around $900 million or so left to spend.” I responded, “Well, you could just give it away to people and organizations in need.” “Ahh, but you can’t,” the man said to me. “Are you just going to hand it to someone and hope they do the right thing with it? You have to build entire infrastructures to give the money away.” He went on to explain that you need to hire legions of people, often hundreds, including teams of lawyers and tax lawyers, finance experts, project managers, communications staffers, and so on, to manage the distribution of the money.
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Marius Hauken, partner Stacc X
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