Mastercard & Visa: CFO Comments at DB Conference (Free on Substack)

Company Update (MA US, V US) (Buy)

An version of this was posted on my Twitter account @LibrarianCap today.

Visa CFO Comments on BNPL

Visa CFO Vasant M. Prabhu, in his appearance at the Deutsche Bank Technology Conference on Thursday (09-Sep), gave several key reasons why Buy Now, Pay Later (“BNPL”) is not a threat to card networks like Visa:

1/ BNPL is just a new way to deliver credit

2/ BNPL volume is still extremely small

3/ The cost of BNPL, in comparison with traditional credit, is not yet clear

4/ BNPL has not yet experienced a full credit cycle

5/ In facilitating larger purchases, BNPL is a positive for card networks

6/ In generating multiple transactions from a single purchase, BNPL is positive

7/ BNPL providers may anyway need Visa or Mastercard to pay the merchants

PS. As a reminder, 80-90% of BNPL transactions seem to be funded by consumers using Visa/Mastercard debit cards, based on disclosures from PayPal and Afterpay.

Full text of the relevant parts of his comments is included below: