Financing My Klarna Doritos Locos Taco
4 days ago
- #Risk Management
- #Regulatory Arbitrage
- #Fintech
- Technology is sometimes used to bypass regulations by rebranding services (e.g., 'beeblebrox' instead of 'swimming pool').
- Crypto and similar technologies exploit regulatory gaps by being complex enough to avoid scrutiny.
- Companies like Uber, AirBnB, and DoorDash use technology as a 'fig leaf' to skirt regulations and grow rapidly.
- Klarna operates as a 'Buy Now, Pay Later' service but effectively functions as a credit provider without adhering to credit regulations.
- Klarna avoids using credit scores, leading to potential issues with bad debt and consumer protection.
- Klarna's business model targets individuals who may struggle to repay loans, increasing financial risk.
- Klarna's losses have doubled, with more users failing to repay loans, mirroring issues seen in other BNPL services.
- Klarna's approach resembles MoviePass's unsustainable model of offering services at a loss.
- BNPL companies may eventually tighten regulations to survive, but loopholes may persist.