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> Whenever you see a BNPL offer for 0% it means the merchant is paying the interest on behalf of the consumer.

I don’t think this is true - the merchant pays a transaction fee (around 3-5%) with companies like Affirm or Klarna, which is not much different than typical credit card fees. The merchant is not paying an interest rate or liable to pay more if the customer fails to pay on time.

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You’re on the right track, but have the wrong specifics.

A merchant accepting card payments might pay “sticker rate” for processing, 3%, at the outset; but, they eventually get IC+ pricing as their volume increases. This might be closer to 1-2%.

If they pay 5% to a BNPL, that extra 2-4% is meant to cover the interest of the “loan” if the customer doesn’t pay back on schedule.

Sure but the merchant isn’t literally paying interest - yes they get charged a fee which helps subsidize an interest-free loan, but that fee is not interest nor is the merchant party to any loans that the consumer enters. The merchant gets paid more or less immediately minus a fee - similar to how a credit card transaction works.

I am 1000% correct. Go look at Affirm’s Q1 2023 earnings supplement, slide 14.

Average MDR is actually closer to 5-7%, 0% is closer to 12.5%

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