In addition to Strawman's point I would add that these comapanies would have a significantly lower weighted cost of capital (WACC).

Basically they can borrow fiunds (or maybe use their own cash) to fund their loan book, at cheaper rtes than their competition.

In a nutshell, they can either have Higher Margins, or they can price the smaller players out of the market.

I think they would most likely go for margin, using Brand recognition to get market share, but if a price war develops between Paypal and Apple, then AfterPay and Co, will be collateral damage.

From FNArena 29/06/2021

APT - AFTERPAY LIMITED

UBS rates APT as Sell (5) - Afterpay has launched one-time cards for use at non-integrated merchants such as Amazon. UBS believes this represents an evolution in the company's revenue model, from merchant fees to affiliate marketing.

The broker considers this a positive development and increases medium term sales assumptions in the US by 29%. The base case now assumes $70bn in underlying sales in existing markets and a further $13bn in sales in new markets by FY25.

The re-evaluation of the sales outlook drives an increase in the target to $42 from $37. UBS maintains a Sell rating on valuation grounds.

Target price is $42.00 Current Price is $119.30 Difference: minus $77.3 (current price is over target). If APT meets the UBS target it will return approximately minus 65% (excluding dividends, fees and charges - negative figures indicate an expected loss). Current consensus price target is $121.61, suggesting upside of 1.9%(ex-dividends)The company's fiscal year ends in June.

Forecast for FY21:

UBS forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 12.00 cents . At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 994.17. How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -19.3, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is N/A.

Forecast for FY22:

UBS forecasts a full year FY22 dividend of 0.00 cents and EPS of 67.00 cents . At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 178.06. How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 27.2, implying annual growth of N/A. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 438.6.

Market Sentiment: 0.4All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources