The innocent 'buy now, pay later' hides a hook.

Here's a rant.

I enjoy researching Chinese concept stocks and internet monetization models. While vacationing in Australia these past two weeks, I casually noticed that Trip.com's app offers two "buy now, pay later" (BNPL) options—immediately triggering alarm bells. Oh? New ideas brewing?

One is Trip.com's "Na Qu Hua" (Take Now Spend). Similar to Huabei, it follows the traditional credit card model of "spend first, repay later." This credit model innovation is essentially consumerism's dimensional strike on human nature. As the saying goes, the endgame of the internet is lending. The core hope of BNPL is to get you to buy now, borrow later—profit from your purchase first, then profit again from your debt. Double-dipping, flipping you like a perfectly grilled steak. Behind "Na Qu Hua," the actual operators are small loan and consumer finance companies. The process is simple: a text version of Ni Ping (a famous host) reads you a long disclosure, you click "I agree," they check your credit, and voilà—money borrowed.

Regarding consumer loans and cash loans that boost spending, my personal view is this is a normal societal phenomenon, and arguably not a bad thing. I’ve long supported fintech lenders like Qifu, FinVolution, and Lexin, even investing in their stocks. Why? First, economic growth needs consumption stimulus. Second, emergencies happen—without these platforms, some might fall into the abyss of loan sharks, with tragic outcomes. So commercially and morally, as long as it’s fair, I see it as ethical. Third, let’s be crass: as a shareholder, these companies are wildly profitable with high dividends.

But beyond "Na Qu Hua," I discovered Trip.com’s new trick: "Buy Now, Pay Later." Worried you’ll hesitate at checkout, sword drawn but aimless? It lets you "reserve"—claim a product’s delivery right (like a free option) without paying upfront. Only when you book travel dates does the cost hit your bill, repayable next month. The rest follows standard loan logic. A so-called "Double 11" travel hack: users order at ¥0, Trip.com fronts the cash. Cancel unused reservations? No problem.

What’s really going on?

Legally, BNPL involves two contract types: 1) traditional installment loans tied to spending, and 2) factoring (where a factor advances credit against receivables). Trip.com’s "reserve now, pay later" is marketed as "credit purchase service" but operated by Tianjin Quyou Factoring—clearly the second type: factoring.

To use this in travel bookings, you must authorize Chongqing Trip.com Microfinance and partners to access your personal data and credit report. Even with factoring, your credit gets pulled. A new consumer credit account quietly appears—so stealthily you might not even know it exists. CCTV’s 315 exposé on Tongcheng Financial highlighted similar practices.

As a user, how to view this model? For fun, I dug deeper. BNPL isn’t new—China’s market matured a decade ago with Ant’s Huabei, JD’s Baitiao, and WeChat’s Fenfu saturating penetration. Even in travel, Fliggy+Huabei’s "reserve without payment until booking" launched six years ago. Trip.com’s 2024 launch is essentially a 2014 product—filling a gap, belatedly.

I suspect this is low-cost customer acquisition. With cash loan CACs now exceeding ¥1,000 per approved user, subsidizing some interest to hook users via BNPL is a steal.

Trip.com’s fine print states: "Reserve Now, Pay Later is powered by Na Qu Hua Credit Purchase." To use it, you must agree to Na Qu Hua’s terms, unknowingly opening a credit line. Thus, this feature is just Na Qu Hua repackaged for travel—a Trojan horse to convert users into future cash loan clients. Pure CAC play.

Post-signup, "reserve" credit limits are tiny and opaque. One user couldn’t reserve a second ¥2,699 hotel after the first—limits differ between Na Qu Hua and this feature, with the latter’s cap hidden.

Rates are steep. While Reserve Now hasn’t hit its first repayment cycle, Na Qu Hua’s cash APR is ~18% (0.05% daily), versus Ant’s 16% or lower, and some bank cards at ~5%. (As they say, Zhang Daqian opens a noodle shop—everyone’s deal differs. Check yours.)

Trip.com’s travel biz thrives, but financial services’ fat margins tempt. Its 2023 report shows "other revenue" (including finance) hit ¥3.5B, up from ¥12.03M in H1 2018—a 168% CAGR. (We all know "other" means finance dominates—quietly printing money.) Likely its fastest-growing segment.

With China’s travel rebound, OTA commissions face pressure—hostels and agencies already protest. As margins squeeze, Trip.com needs a second act. But if you’re a user, not a shareholder, mind the hooks. A transparent personal loan might serve better.

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Not investment advice. Just riffing. Author holds no position in $Trip.com(TCOM.US).