BNPL – VIETNAM FORECAST

GMV of BNPL services in 2022 and 2028 GMV of BNPL in ecommerce 2023 and 2026
(in million U.S. dollars)

10,528

x21
times

496

2022 2028

By Statista calculation IDC InfoBrief: How Southeast Asia Buys and Pays 2022 | New Opportunities, Connectivity and Risks
 BNPL <> CREDIT CARD
Seq Attribute Buy now pay later (BNPL) Credit card
1 Functionality Short-term financing at point of sales (POS) , allow shopper to pay installments
2 Debt trap Yes and no, depending on user's financial plan
Real-time credit in the event of shopping In prior to shopping, credit reports and gross annual
3 Risk underwriting
Objective: define users who have intention not to pay income level are reviewed to determine credit limit
Low-and-grow strategy
-> exact amount for first time borrower is small amount Most credit cards are issued with preset limit
4 Credit assignment
-> gradually increase when borrower exhibits positive -> this can increase over time or upon requests
repayment behavior
VND 500,000 -> 5,000,000
5 Ticket size Varying
(USD 21 -> 208)
6 Frequent usage Apparel , personal effects , mass market (*) Varying
7 Targeted users Underbanked or unbaked users Banked users
8 Fee and interest generally, don't charge any fees Annual fee
BNPL x Merchant Credit card x Merchant
9 Merchant relationship
= commerce enablement + Co-MKT = profit sharing
10 User relationship often involves full shopper journey (pre to post) Only involve in the event of payment

(*) Personal effects = Electronics, Fitness/Sporting Equipment, Games/Hobbies, and Jewelry

Mass markets = Department Stores, Discount / wholesale, General Goods, and General Merchandise
BNPL – SEA LANDSCAPE
 BNPL – FIVE SETS OF MODEL

McKinsey : Buy now, pay later: Five business models to compete

07-2021
 BNPL – US | MATURE MARKET
7 volume 14
Purchase UNIQUE BNPL BORROWERS BY AGE COHORT
Private-label credit cards (PLCC)
Buy now, pay later (BNPL)
1,492

1,100 14
1,012

135

($) Ave annual spend per customer Ave receivable

($) Ave annual transactions per
per customer
account

Younger users (18->33) are more over-indexed in their BNPL

usage than older cohorts

McKinsey : Buy now, pay later: Five business models to compete Consumer Financial Protection Bureau : Buy Now, Pay Later: Market trends and consumer impact
07-2021 09-2022
BNPL – US | MATURE MARKET
Unit margin
Unit : % 2020 2021 Var
Revenue
MDR 2.91 2.49 (0.42) Increased competition
from existing + new players
Interchange 0.60 0.67 0.07
Referral/Affiliate 0.23 0.32 0.09
Late fee 0.20 0.28 0.08
Transaction fee 0.29 0.26 (0.03)
Revenue total 4.24 4.02 (0.22)
Expense
Underwriting (0.09) (0.08) 0.01
Cost of Fund (0.24) (0.16) 0.08
Payment processing / servicing (1.49) (1.47) 0.02
Credit loss provision (1.15) (1.30) (0.15) Bad debt spikes

Expense total (2.97) (3.01) 0.04

Net transaction margin (NTM) 1.27 1.01 (0.26)