The Battleground for Merchant Fees

Buy now pay later started as a way to provide consumers with affordable payment structures without fees or penalties. Big players like a firm and Clara emerged, leveraging Reg Z and avoiding interest-bearing loans. However, competition intensified, leading to a race to the bottom for merchant fees. Consumers started stacking loans, unaware that companies weren't reporting these to credit bureaus. As interest rates increased and loan defaults multiplied, the cost of issuing loans rose.