Splitit boss hits out at 'profiteering' buy now, pay later rivals

The head of new buy now, pay later entrant Splitit has hit out at rivals offering vulnerable consumers lines of credit, saying they will be hit hardest by the economic pressures brought on by COVID-19.

Splitit chief executive Brad Paterson told The Age and The Sydney Morning Herald that companies who “gouge and profiteer” will suffer, as they are more likely to weather bad debts and lose customers as scorned users look for alternatives.

“Companies who aren’t gouging or profiteering from this by giving credit to those who shouldn’t have it, they will do very well,” he said. “But those who try to … will pay a price dearly in the future.”

Australia’s two largest buy now, pay later companies, Afterpay and Zip, provide lines of credit to consumers and shares in both have plunged as investors raised concerns over what effect the coronavirus would have on their businesses.

Splitit, however, does not take on debts itself, instead utilising the unused credit on a customer’s credit card to pay for an item upfront and then charging the customer in monthly instalments.

It is for this reason the US-based executive maintained his newly-listed company was well-placed to weather the coronavirus, which has stymied spending and caused a massive spike in unemployment globally.

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Source: Splitit boss hits out at ‘profiteering’ buy now, pay later rivals