This story was originally published on Payments Dive. To receive daily news and insights, subscribe to our free daily Payments Dive newsletter. The state of New York has released a proposal for its new buy now, pay later rules, calling it a “new nation-leading” template for ensuring consumer protections.  The proposed regulations would codify a bill passed last year by the state’s legislature and signed by Gov. Kathy Hochul. The governor touted the proposal in a press release Monday and the New York Depar ...

Core Insights - The Buy Now, Pay Later (BNPL) industry is currently a polarizing topic in the market, generating significant discussion among investors and analysts [1]. Group 1: Market Sentiment - There is considerable noise in the market regarding the BNPL industry, with varying opinions from critics and supporters [1]. Group 2: Analyst Perspective - The article is written from a personal perspective, aiming to provide insights for both beginners and advanced readers, focusing on business and economic analysis [1].

Core Insights - Financial institutions and fintech companies are capitalizing on simplifying money management and providing easier access to funds for customers [1] - While traditional banks show moderate growth, emerging fintech stocks like Sezzle present potential for higher returns [1] Company Overview: Sezzle - Sezzle is a leading player in the buy now, pay later (BNPL) market, offering customers the ability to split purchases into smaller monthly payments [3] - The company reported a 67% year-over-year revenue growth and a 73% increase in net income for Q3, indicating strong market share gains and margin expansion [4] - Sezzle's net profit margin stands at 22.8%, the highest in the BNPL industry [4] Market Potential - The extreme bullish scenario for Sezzle suggests that BNPL could replace credit cards or significantly capture market share in the coming years [5] - Sezzle has nearly 3 million active customers, positioning it well for future growth [5] Concerns and Resilience - Concerns exist regarding the sustainability of BNPL due to high living costs, contributing to a 60% decline in Sezzle's stock from its all-time high [6] - Despite these concerns, Sezzle's former chief revenue officer noted that 95% of customers paid on time, reflecting a positive trend in repayment behavior [7] - Sezzle has set aside $33.7 million for credit losses, which have more than doubled year-over-year, yet continues to attract new customers and maintain sufficient cash reserves [8] Industry Outlook - Financial stocks, including Sezzle, are expected to deliver returns as money management remains a necessity for consumers [9] - Sezzle's recent stock correction may present an attractive investment opportunity as it continues to gain market share in the BNPL sector [9]

Core Insights - Affirm Holdings, Inc. (AFRM) has partnered with Pacsun to offer pay-over-time options at checkout, targeting holiday shoppers [1][9] - The partnership allows Pacsun customers to choose interest-free biweekly payments or longer monthly plans up to 24 months, enhancing customer engagement [2][9] - Affirm's strategy of no hidden fees or late fees is expected to drive transaction volume and customer loyalty [2] Group 1: Partnership and Strategy - The collaboration with Pacsun aims to capture increased demand during the holiday season, a critical time for retail sales [1][4] - Pacsun is incentivizing customers with a limited-time 10% discount using a special AFFIRM code, promoting higher adoption of the BNPL service [2] - The fashion retail sector is well-suited for buy now, pay later (BNPL) services due to the nature of frequent and impulse purchases [3] Group 2: Financial Expectations - Affirm anticipates December quarter revenues to be between $1.03 billion and $1.06 billion, driven by the holiday shopping surge [3][9] - The company expects its gross merchandise volume (GMV) for the December quarter to range from $13 billion to $13.3 billion [4] Group 3: Market Position and Competitors - Affirm's merchant network has expanded to 420,000 partners, enhancing its visibility among a younger audience that favors installment payments [3] - Competitors like PayPal and Block are also expanding their BNPL services, with PayPal reporting an 8% increase in total payment volume to $458.1 billion [5] - Block's BNPL platform achieved a GMV of $9.7 billion, reflecting a 17% year-over-year increase, indicating a competitive landscape [6] Group 4: Valuation and Earnings Estimates - Affirm's shares have increased by 12.8% year to date, outperforming the broader industry but lagging behind the S&P 500 Index [7] - The company trades at a forward price-to-sales ratio of 5.08X, higher than the industry average of 4.83X, indicating a premium valuation [11] - The Zacks Consensus Estimate predicts a significant earnings surge for Affirm, with a projected 566.7% year-over-year growth for fiscal 2026 [13][14]

Core Viewpoint - Ovanti Ltd is pursuing a backdoor listing on Nasdaq through a SPAC deal with Miluna Acquisition Corp, which could significantly enhance its market presence and valuation [1][2][3]. Group 1: Company Overview - Ovanti's flagship product, Flote, is a Buy Now Pay Later (BNPL) service aimed at the subprime market in the U.S., targeting consumers who struggle with traditional credit scores [3]. - The proposed SPAC deal values Ovanti at approximately US$300 million (A$460 million) [3]. Group 2: Strategic Moves - The signing of a Letter of Intent (LOI) with Miluna marks a significant milestone for Ovanti, following a global search for a suitable U.S. SPAC partner [4]. - Ovanti's strategy aligns with industry trends, as seen with peers like Zip and Sezzle, who are also pursuing U.S. listings to enhance shareholder value and support growth in the U.S. market [5]. Group 3: Market Context - Miluna Acquisition Corp recently listed on Nasdaq with 6 million units priced at US$10 each, indicating a strong entry into the U.S. market [2]. - The deal is expected to provide Ovanti with access to a more liquid stock market, which is crucial for its growth strategy in the U.S. [2].

Core Insights - Klarna is expanding its partnership with Blackhawk Network to enhance gift card purchasing options for consumers ahead of the holiday season [2][3] - The collaboration allows consumers to purchase digital gift cards from over 350 brands using Klarna's payment options, which include Pay in Full, Pay in 4, and Financing [3][4] Company Developments - Klarna's chief commercial officer emphasized the importance of flexibility and control for consumers in gift card purchases as the company continues to grow in the U.S. market [2] - The partnership aligns with the rising popularity of digital gift cards, which can now be added to digital wallets like Apple Wallet and Google Wallet [5] Industry Trends - The demand for digital gift cards is increasing, with 81% of consumers having purchased a gift card in the previous year, marking a 6% increase from the prior year [5] - Klarna is evolving into a neobank, supported by a global retail payments network, with a revenue mix that includes merchant fees, interest income, and value-added services [6]

Core Viewpoint - Sezzle has experienced significant growth but has recently faced a sharp decline in stock price, presenting a potential buying opportunity amidst broader market concerns about the fintech sector and credit risks [1][2][3]. Company Performance - Sezzle's stock fell 43% since September 9, underperforming compared to other fintech stocks [3]. - Despite the stock's decline, Sezzle reported strong third-quarter results, with gross merchandise volume increasing by 58.7% to $1 billion and revenue rising by 67% to $116.8 million [8]. - Adjusted EBITDA rose 75% to $39.6 million, and adjusted earnings per share increased from $0.47 to $0.71 [9]. Market Position and Strategy - Sezzle operates in the buy now, pay later (BNPL) space, offering a "pay in four" feature and generating revenue primarily from merchants through a 6% processing fee plus $0.30 per transaction [9]. - The company positions itself as more user-friendly and less predatory than competitors, implementing measures to limit credit risk by cutting off users who miss payments [10]. Financial Metrics - Sezzle's current market capitalization is approximately $2 billion, with a forward P/E ratio of 16 based on an updated adjusted EPS of $3.38 for the year, indicating a potentially attractive valuation for a high-growth company [12]. - The provision for credit losses doubled to $32.2 million in the third quarter, reflecting rising credit risk in the current macroeconomic environment [13]. Future Outlook - If Sezzle can navigate the current market volatility, there is potential for significant stock appreciation, with a 10x gain considered possible if the company maintains its growth trajectory [14].

Core Insights - The Buy Now, Pay Later (BNPL) industry is experiencing a pivotal moment, particularly for Affirm, as it prepares to report its fiscal Q1 2026 earnings, raising investor questions about the timing for buying or selling [2][3] Financial Performance - Affirm is set to report fiscal Q1 2026 results, covering the period from July to September 2025, with key metrics including revenue growth, earnings per share, gross merchandise volume (GMV), credit quality, and the performance of the Affirm Card, which saw a 97% increase in active users to 2.3 million in Q4 [3] - For the fiscal year ending June 30, 2025, Affirm achieved its first-ever full-year GAAP net income of $52.19 million, a significant turnaround from the previous year's net loss [8] - The company reported a 43% year-over-year increase in GMV during its strong fiscal fourth quarter, marking its first quarterly operating profit [9] Market Conditions - Recent Federal Reserve rate cuts have eased funding pressures for BNPL players, improving margins and funding flexibility for Affirm [4] - Regulatory risks have diminished, as the CFPB reversed its earlier decision to classify BNPL lenders as "credit card providers," leading to a more favorable operating environment for Affirm and its peers [5] Stock Performance - Affirm shares have increased by 67.1% year-to-date in 2025, with a 52-week trading range between a low of $30.90 and a high of $100.00 [8] - The stock opened at $71.14 but declined to a low of $66.24 during the session at the time of writing [9] Industry Comparables - Klarna (KLAR), a relevant comparable in the BNPL space, has seen its stock price decline to around $35.66, more than 10% below its $40 IPO price, despite analysts maintaining a "Buy" consensus [10][12] Future Outlook - With high interest rates and regulatory uncertainties largely resolved, the BNPL industry is shifting focus towards diversification, with major players exploring traditional banking services [13]

Core Insights - Affirm Holdings, Inc. is a significant player in the buy now, pay later (BNPL) sector, with quarterly earnings set to be released on November 6, 2025, and Wall Street estimates earnings per share (EPS) at $0.10 and revenue at approximately $882 million [1] - The Internet Software sector, including Affirm, is expected to benefit from advancements in artificial intelligence, cloud computing, and automation, contributing to a projected revenue increase of 26.7% year-over-year, reaching $885 million [2] Financial Performance - Affirm is anticipated to report a revenue increase of 26.7% year-over-year, reaching $885 million [5] - The company has a strong liquidity position with a current ratio of approximately 54.19, indicating ample current assets to cover liabilities [3][5] - However, Affirm's debt-to-equity ratio is about 2.56, suggesting a significant reliance on debt financing relative to equity [3][5] Market Challenges - Despite the positive outlook, Affirm faces challenges from high interest rates and market volatility, which could moderate revenue growth [3][5] - Investors should closely monitor management's discussion during the earnings call to assess the sustainability of price changes and future earnings projections [4]

Core Insights - The UK BNPL (Buy Now, Pay Later) market is undergoing significant regulatory changes aimed at increasing consumer protection and lender accountability [2][6][19] - The Financial Conduct Authority (FCA) will impose stricter checks and regulations on BNPL providers, aligning them more closely with traditional lending practices [3][6][10] Regulatory Changes - Starting mid-2026, BNPL providers will be required to conduct more detailed affordability checks for customers, moving away from the current practice of minimal checks based on self-reported income and expenditure [1][6][8] - The FCA will oversee the BNPL market, ensuring that customers receive the same protections as traditional borrowers, including the ability to escalate complaints to the financial ombudsman [6][11] Market Dynamics - The BNPL market has seen substantial growth, with approximately 11 million UK adults using BNPL products in the year leading up to May 2024, an increase from around 8.8 million two years prior [5] - The rising cost of living has heightened demand for BNPL services, as they provide a means for consumers to manage larger, unexpected expenses [4][5] Business Implications - Companies will need to adapt their business models to comply with new regulations, which may include obtaining consumer credit licenses and implementing more rigorous application processes [13][15] - Providers that can effectively integrate regulatory compliance with innovative solutions are likely to thrive in the evolving financial landscape [18][19] Consumer Impact - Enhanced checks are expected to reduce the number of customers approved for BNPL lending who cannot afford repayments, thereby decreasing the risk of unmanageable debt [10] - Firms will be required to communicate with customers regarding missed payments and direct them to debt advice services if necessary, reinforcing a customer-centric approach [12][16]