The 'Buy Now, Pay Later' Bubble Is About to Burst

I've been surprised at how widely set up these programs are. They must have some models that they show retail CEOs that's highly compelling. (I assume that model includes sales going up and to the right.)

But the costs seem insane to me! I know that retailers are willing to pay a few percent to lock in a sale (traditionally going to subsidize gift cards, referral programs, etc.), but giving up interest for months and leaving a cushion for defaults and leaving enough for the BNPL company to make their profit? I've just been surprised that there's enough to go around. Does anybody have a sense for what companies who do this are thinking?