Companies in Australia’s under-pressure buy now, pay later sector will have to raise more money from investors in 2022, as bad debts and losses balloon, according to one of Australia’s leading payments industry experts.

Grant Halverson, the founder and chief executive of payments consultancy McLean Roche, also warned the likelihood of rising interest rates next year threatens to hurt the industry’s margins, as operators fund their interest-free loan books by borrowing at fixed margins above variable benchmark interbank lending rates like LIBOR.