In today’s episode Tarun Bhasin, CEO of Kunai is joined by Brad Kelly, Managing Director at Payment Services. We continue the conversation on the ubiquity of FinTech and discuss various facets of buy now, pay later (BNPL) and how it will affect the current market, both in America and Australia. Brad lends his expertise to the phenomenon of BNPL, interrogates its role in the Australian banking system, and reflects on the regulatory challenges it will likely face with conservative banks in the not too distant future.

Key Points From This Episode:

• Introducing today’s guest Brad Kelly, Managing Director of Payment Services, and our host Tarun Bhasin, CEO of Kunai.
• An overview of the Australian banking and customer market today, and what the future holds.
• How the Pareto principle is evident in Australian banking.
• How banks use the data provided by the Australian reserve bank every month.
• The considerable growth of debit cards in Australia and how citizens are changing their spending habits.
• How Afterpay works and why it’s not necessarily as profitable as it presents itself to be.
• A discussion of BNPL and its presence in Sydney, Australia as well as Apple’s potential plans for it in the United States.
• PayPal’s presence in Australia and how their transaction fees are structured.
• The strategies that Afterpay is using to target Millennials.
• Why Qantas is a serious player in the financial services market, and how they demonstrate that credit cards will continue to grow and be popular. 
• Why Starbucks initially fared very poorly in Australia and how they were eventually able to find a market with American tourists.
• How digital wallets differ in Australia and America.
• Why buy now, pay later cards are limited in their revenue potential.
• How the different regulations around credit in Australia and America affects average spending habits.

Tweetables:

“Basically, you can apply this 80-20 Pareto principle to all Australian banking, and they've successfully watered off just about every challenge that's ever come at them. The ones that have, they buy them. That’s pretty much how it works.” — Brad Kelly [0:02:05]

“Australia has a couple of unique quirks besides killer spiders and snakes and people called Hemsworth. What we've got is a very strong banking system, but we've got this indigenous debit payment network called EFTPOS, and it’s been around for about 45 years.” — Brad Kelly [0:04:14]

“So the Citibank model, for instance, which is a virtual card in a wallet, and it runs on MasterCard rails. So what that means is it just behaves like a standard card or the point of sale. There's nothing tricky necessarily about it. ” — Brad Kelly [0:11:15]

“I think the real risk for Afterpay and their cohorts is the risk of regulation.” — Brad Kelly [0:33:52]

Links Mentioned in Today’s Episode:

Brad Kelly on LinkedIn

Tarun Bhasin

Kunai

Sniip

AfterPay

Marqeta

PayPal