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I Will Gladly Pay You Tuesday for a Hamburger Today – A Snapshot of BNPL Services

If any business was involved in e-commerce during the pandemic, odds are they did rather well. Several such companies including Pelton, Netflix and others saw tremendous growth during 2020 as a result. Interestingly, one of the areas that also saw a boom involved buy now, pay later (BNPL) services. Rather than having to pay the full purchase price of an item or service, short-term installments were permitted. In most cases, these extensions were completely interest free and without additional costs. In fact, many merchants subsidized BNPL companies to offer these options to consumers. Knowing that some might be on the fence about a purchase, this added perk could tip them over the edge. And for an increasing number of consumers, BNPL services are becoming a norm.

(Take a look inside the buy now–pay later business model in this Bold story.)

Though BNPL services sound a lot like credit cards or layaway plans, there are notable differences. Differences in fees, access, and credit score impacts are among the most significant ones. Likewise, for the most part, BNPL companies are unregulated in the finance sector. This seems rather odd given the nature of their services. But even more intriguing is how an economic downturn might affect BNPL companies as well as consumers. As interest rates and inflation increase, everyone involved could share an increasing amount of risk. It’s therefore little surprise that recent valuations of these enterprises have taken a substantial hit as of late.

“People are buying more than they should, and they admit it. Whether it’s aggressive marketing, whether it’s impulse buying, whether it’s a belief that, ‘I’ll have more tomorrow,’ they’re using lots of these [BNPL services].” – Marshall Lux, a Harvard Kennedy School Research Fellow

The Rise of BNPL Services

Prior to the pandemic, BNPL companies were essentially nonexistent. But it soon became clear that merchants online wanted to encourage purchases among their customers. Certainly, they could offer discounts, BOGOs and other incentives. But as it turns out, buying now and paying later was a big hit with consumers. In Europe, BNPL services are promoted as a way to try out a product before paying in full. This helped establish greater trust between e-commerce sites and customers. In the U.S., BNPL companies marketed better cash flow for customers as a result of spreading out payments. In both cases, many people began using these services when making routine purchases. Without any interest to pay, and a bit longer to pay in full, there appeared to be little downside. And merchants were happy to pay the fees to host BNPL services on their sites.

Today, there are several BNPL companies on the market. By far, Affirm is the largest one, but others like Klarna and Zip are similarly well known. PayPal has also gotten in on the game, and Apple will soon launch its own BNPL services under Apple Pay Later. In each of these instances, customers usually extend payments into four installments over six weeks that are interest free. This has clear benefits over traditional credit cards that often have high interest rates. These offerings are also better than traditional layaway plans that hold the item until full payment is received. It’s no wonder that consumers have seen BNPL as a means for immediate gratification without adding additional costs.

“What it signals to me is this is a means to an end. It’s a considered choice about how to make money go a little further and still achieve the goals that you want and still get the things that you feel like you need.” – Charlotte Principato, Financial Services Analyst, Morning Consult

A Potentially Risky Venture

For the most part, the road had been pretty smooth for most BNPL companies through the pandemic. But in the last two quarters, the industry is experiencing some readjustments in overall valuations. Just as Peloton and Netflix have experiences their own post-pandemic woes, so have these companies. For example, after experiencing 528% YOY growth as of Q3 of 2020, Klarna growth has slowed substantially. As of Q1 of 2022, its YOY growth is now about 53%. At the same time, companies offering BNPL services are being devalued by investors. Affirm has experienced an 87% decline in its value since its peak in November of 2021. Zip’s valuations have tumbled about 155%.

Someone using a BNPL app
Wimpy, the character from Popeye with an affinity for hamburgers, was a pioneer of BNPL services.

These statistics doesn’t necessarily mean BNPL services are going anywhere. In fact, they have become known as the “Gen Z credit card” because of its popularity among this generation. But inflation could tempt consumers to bite off more than they can chew with these BNPL companies. In addition, BNPL companies do not report to credit agencies and are not regulated by the Consumer Financial Protection Bureau. In theory, this allows consumers to easily overextend themselves using BNPL strategies without anyone knowing. Not only could this be bad for customers but for merchants and BNPL companies as well.

“The opportunity to stack your debt by using multiple Buy Now, Pay Later loans through multiple service providers is one of the biggest risks I see.” – Terri R. Bradford, Research Specialist in Payment Systems, Kansas City Federal Reserve

An Unpredictable Future Ahead

According to some experts, the BNPL services industry is expected to continue to grow in coming years. Average annual growth is projects at 43%, reaching over $180 billion in total revenues. Given its unregulated nature, and attractive allure, this indeed may be the case. But there are some additional risks to the industry even if regulatory changes don’t occur. Perhaps the most concerning involves rising interest rates, which could undermine profits for many BNPL companies. Since most use securities to fund short-term installment loans, higher rates will mean higher company expenditures. This could spell trouble for the industry as a whole.

Over the long-term, it is possible that BNPL companies will have to comply with new regulations set by the CFPB. They may also have to start reporting to credit agencies for greater transparency about consumer credit worthiness. But for now, no one expects such changes to take place in the next few years. This is why most financial gurus anticipate the current devaluations are simply post-pandemic adjustments. Despite these predictions, the bottom line is BNPL services are new and have yet to weather an economic downturn. In all likelihood, much will be learned in the coming years about precisely the role BNPL services will play in consumer finance.


Want to control your cost efficiency and protect your bottom line? Bold Business can help.

A Gene-Editing Breakthrough and a New Possible Treatment for HIV

For nearly half a century, researchers have battled to find a curative treatment for HIV. Along the way, many groundbreaking therapies and medications have been identified. But while these treatments help people manage their infection fairly well, targeted cures against HIV remain elusive. Based on recent discoveries, however, that may be about to change in the near future. Using gene editing technology, scientists have been able to develop better strategies that may actually eradicate HIV infections. They are therefore quite hopeful that gene editing therapy for HIV may be the way of the future.

(What are some current drug treatments for HIV? Dig into this Bold story and find out.)

For several years now, researchers have tried to use gene editing therapies for HIV without much success. Their goal was to boost a person’s immune system by placing key gene sequencies within immune system white blood cells. While some were successful in achieving this, their success only occurred with white blood cells in the lab. Efforts to use gene editing technology to alter immune cells in the body proved challenging. But this is where some scientists have made some important gains. If immune cell changes can be produced within a person infected with HIV, the potential for an actual cure is much greater. And these same technologies and strategies could help treat many other conditions as well.

“Until now, only a few scientists, and we among them, had been able to engineer B [white blood] cells outside of the body, and in this study, we were the first to do this in the body and to make these cells generate desired antibodies.” – Adi Barzel, Researcher in Biochemistry and Molecular Biology, Tel Aviv University

How Gene Editing Therapy for HIV Works

To explain gene editing technology used by the researchers, it’s important to appreciate the challenges associated with HIV. The HIV virus itself poses many difficulties when trying to develop a cure. For one, it hides within immune cells, making it difficult for immune cells to target the virus. Likewise, the HIV virus rapidly changes or mutates, which means a single antibody against HIV won’t be very effective for long. This is why vaccines have been less than ideal against HIV. Understanding this, scientists need to create an immune cell that produces a broad range of antibodies against HIV. And this is where gene editing therapy for HIV treatment has been proposed as an option.

A scientist examining some giant DNA strands
Gene-editing technology is the latest–and maybe greatest–innovation in the fight against HIV.

For years, researchers have tried to add gene sequences to B cells so they may produce broad neutralizing HIV antibodies. Using gene editing technology called CRISPR, they can cut B cell genes and add other genes known to produce the types of antibodies they want. However, prior to now, this has only been accomplished in a lab outside a test animal. While this process might be used to develop HIV treatments, the costs and equipment required to do so isn’t feasible. Therefore, the goal has been to use gene editing therapy for HIV by altering B cells within the test animal. This is where recent breakthroughs have been made, resulting in the production of broad, neutralizing antibodies against HIV in mice.

“When the CRISPR cuts in the desired site in the genome of the B cells, it directs the introduction of the desired gene, the gene coding for the antibody against the HIV virus.” –  Alessio Nehmad, PhD Student in the School of Neurobiology, Biochemistry and Biophysics, Tel Aviv University

An Innovative Approach and Breakthrough

The recent breakthrough concerning gene editing therapy for HIV involved the use of another virus. Adeno-associated viruses are common, but they trigger minor if any immune responses in human beings. They are also easily programmed from a genetic perspective, and they can target specific cells for gene editing. Understanding this, scientists at Tel Aviv University used two adeno-associated viruses as part of their gene editing technology. The first virus targeted B cells in mice and used CRISPR to cut a specific gene region. The second virus then placed genes known to produce broad neutralizing antibodies against HIV. The end result produced B cells capable of ramping up production of huge amounts of the anti-HIV antibodies.

The use of these adeno-associated viruses, known as virus vectors, is what allowed B cells to be changed within the mice. This makes gene editing therapy for HIV much more plausible from a practical perspective. Plus, when the scientists test these B cell responses against HIV, they found them to be very effective in neutralizing HIV infection. As a result, they believe this approach is not only safe and effective but also highly scalable. In other words, this gene editing technology approach can be developed for widespread use with relative ease. As a result, it offers much greater promise for curing HIV infection after acquired when compared to existing medication treatments.

“We developed an innovative treatment that may defeat the virus with a one-time injection, with the potential of bringing about tremendous improvement in the patients’ condition.’” – Adi Barzel

A Much Greater Potential Beyond HIV Treatment

At the current time, the gene editing therapy for HIV has only been successful in the lab and with mice. More research and experiments are therefore required before human trial testing might be feasible. However, the results are extremely promising based on the current level of success. The ability to alter B cell function and response in the body paves the way for gene editing technology use for other infections as well. While this will not replace novel mRNA vaccines, it could well invite much more effective viral treatments long-term.

It is also worth noting that this same gene editing therapy for HIV could be used for other disorders besides infections. Specifically, the researchers at Tel Aviv University suggest that similar strategies could be used against cancer and autoimmune illnesses. By using gene editing technology to change immune cell responses, more specific therapies for these conditions might develop. Given this potential, these recent breakthroughs may be more important than previously realized. If so, the next few decades could usher in a completely new way of fighting disease in a much more comprehensive way.


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NGO Diversity and Inclusion Initiatives – Advancing Opportunities for Women

Over the last few decades, many companies have realized the importance of diversity and inclusion initiatives. After the market crash in 2008, many attributed its downfall to groupthink and a lack of diversity. As such, many companies began purposefully recruiting women and individuals of color in order to achieve diversity targets. Many have hired or appointed chief diversity officers as well. But despite these efforts, shortcomings persist. A lack of inclusion of women in leadership positions as well as racial monitories remains. According to one organization, the inability to see lasting improvements involves how these companies approach the issue. And based on their results over the past decade, they have proof to back it up.

The 30% Club was a campaign that was launched in the United Kingdom in 2010. As its name implies, the target was an inclusion of women in leadership positions exceeding 30% of corporate boards. By introducing a number of diversity and inclusion initiatives, slow progress was made over the last decade. And in 2019, the 30% Club was able to realize its goals within the UK. Given its success, it’s worth taking a deeper dive into this non-governmental organization’s (NGO) approach. If businesses could replicate these strategies in more comprehensive diversity and inclusion initiatives, broader changes might occur. And as statistics show, such accomplishments are beneficial to everyone, including the company’s bottom line.

“The broken rung on the ladder is that men get promoted on potential whereas women are judged on experience so far.  That has to change at all levels, and mentoring and sponsorship is a powerful way to fix that.” – Sheryl Sandberg, prior COO of Meta

Key Diversity and Inclusion Initiatives for the 30% Club

The name of the 30% Club was one that was chosen based on research data. According to several studies, companies attaining diversity levels of 30% or more are the ones that truly thrive. By focusing on the inclusion of women in leadership as well as other marginalized groups, creativity and innovation excel. In fact, companies with gender diversity are 15% more likely to beat average performance standards. Thus, when the founders launched the NGO, they believed achieving a 30% diversity target offered major advantages. And while it took about a decade to achieve this in the UK, it’s clear their approach is an effective one.

The initial strategy involved seeking out corporate leaders of many of the major companies in the UK. After the Great Recession, many CEOs wanted to pursue diversity and inclusion initiatives. Therefore, the timing was ideal. The founders of the 30% Club stressed the importance of mentoring and training women as part of their approach. But interestingly, male mentors would connect with female mentees at different companies. This allowed for a more open and transparent interaction that was mutually beneficial. Not only did mentees gain important knowledge that led to the inclusion of women in leadership. But mentors also learned a great deal about women’s experiences related to discriminations and biases.

“It is such a privilege as a leader to listen to your mentee and not feel judged, because they are from another organization. I took back so many learnings and an increased motivation to support diverse talent.” – Nick Owen, Former Chair at Deloitte

Success in Women’s Inclusion Just a Start

Without question, the 30% Club has made a big impact on the inclusion of women in leadership spots. The 2018 class, which involved 1,000 women, saw 47% promoted within three years. Likewise, 70% of attendees reported greater confidence and empowerment, with most seeing less bias and greater networking opportunities. On a larger scale, the organization’s diversity and inclusion initiatives have resulted in 40% of corporate boards now being women. And despite having only eight companies join the club in 2010, over 680 companies now participate. This includes businesses in over 30 sectors and in 50 different countries.

A woman adding some diversity to a company
Non-governmental organizations are better suited to implement diversity and inclusion initiatives–especially when it comes to putting more qualified women into leadership roles.

While these are remarkable achievements, the 30% Club now hopes to expand their efforts in other directions. The most recent project among its diversity and inclusion initiatives is called “Mission Include.” Instead of just targeting the inclusion of women in leadership, this initiative focuses on other groups experiencing discriminations. Currently, women of color represent only 4% of Fortune 500 companies’ C-suites. And the number of women of color as CEOs can be counted on a single hand. The founders of the 30% Club also recognize the same types of discriminations against all ethnic minorities and those with disabilities. This is currently where additional efforts are being planned for the future.

(Business has an age-discrimination problem–read more in this Bold story.)

“We’ve taken all the low-hanging fruit. To get more women into CEO, COO and CFO jobs we have to break longstanding views. These are difficult decisions which involve breaking strong male friendships and networks to push it forwards.” – Alison Kay, UK&I Managing Partner for Client Service, Ernst & Young Global Limited

A Long-Term Win-Win for All

When it comes to the inclusion of women in leadership, statistics demonstrate such efforts provide clear advantages. Diverse companies have 2.3X more cash flow per employee on average compared to non-diverse ones. Likewise, such companies also enjoy a 19% higher revenue production on average as well. Similarly, in the current climate where talent supply is constrained, diversity and inclusion initiatives are attractive. More that 75% of employees seek out companies focused on diversity and equity as their preferred choice. Each of these are practical reasons why businesses should invest in these pursuits.

It is important to appreciate the success of organizations like the 30% Club. The organizations approach was one where companies voluntarily chose to join the diversity and inclusion initiatives. This strategy is much more effective than diversity mandates because companies tend to be more engaged and invested. As is evident today, the vision of the 30% Club highlights the importance of taking a long-term approach to the issue. Progressively, they have achieved greater inclusion of women in leadership positions. And the same approach will likely help make lasting gains for other marginalized groups as well. As more and more companies appreciate the value of these efforts, perhaps greater diversity, equity and inclusion will be the norm.


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