For a sector many had written off, Buy Now, Pay Later (BNPL) is making an unexpectedly loud return to the headlines. But should it make a return to your portfolio?

Just a year or two ago, BNPL was "over". That was the narrative from the global financial press and some analysts alike. 

Regulation was tightening. Interest rates were rising. Valuations of once-beloved names like Afterpay, Zip, and Sezzle had been slashed to a fraction of their pandemic peaks. Institutional money walked, retail investors followed, and analysts turned their attention elsewhere.

Now, it might be time to look twice.

On this week’s episode of Switzer Investing TV, Jun Bei Liu, Founder and Lead Portfolio Manager at Ten Cap, told Peter Switzer that she sees renewed opportunity in some of the sector’s survivors.

Press play on the below video to jump to Peter Switzer's chat with Jun Bei Liu of Ten Cap on BNPL:

Liu pointed out that as consumer pressure builds, BNPL becomes more appealing - not less. "When things are tough, this is where the consumer sits. They’re looking for tools that help manage cash flow."

Why BNPL matters (again)

BNPL platforms emerged during the 2010s as a more millennial-friendly alternative to credit cards. Less stigma, fewer barriers, more flexibility. But they hit their stride in 2020–21, when easy money, high savings rates and record-low interest rates supercharged growth.

Then came the reckoning. Central banks hiked rates and regulators across Australia, the US and Europe signalled greater scrutiny. BNPL providers saw share prices enter a steep fall. Afterpay was acquired by Block for billions, with the founders cashing out at just the right time. Zip pulled back international expansion. Klarna made sweeping cuts to its Australian expansion plans.

But despite those headwinds, consumer appetite for BNPL never went away. In fact, it may be growing again.

A recent report from Billboard revealed that over 60% of general admission ticket buyers at this year’s Coachella music festival used payment plans to secure their spots. That’s not a niche use case - that’s mainstream.

Fans paid as little as US$49.99 up front for tickets worth nearly US$600. According to industry insiders, festivals are increasingly marketing the payment plan - not the music - as the headline draw. A $50 deposit gets you in. Pay the rest off in three chunks. No credit card required.

It’s not just Coachella, either. Lollapalooza, Rolling Loud and Electric Daisy Carnival all now sell the majority of their tickets using BNPL-style systems. And as music festivals collapse all over Australia, it might be time for Australian organisers to start considering these ticket funding methods to stay afloat.

Zip, Block/Afterpay and others: are they buys again?

For investors, the question isn’t just "is BNPL back?" It’s "what’s changed?"

Jun Bei Liu is clear-eyed. Zip is still a small player in the US, she says, but that leaves room for growth. "There’s enormous opportunity still. And the acceleration in their latest numbers is a positive sign."

She’s not alone. Some fund managers are quietly dipping back into names they exited in 2022, now that valuations are more realistic and the market is focusing on sustainable revenue, not just user growth.

But risks remain: margin pressures, bad debt exposure, and the possibility of tighter regulation still linger over the sector.

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