Great point and a tale of two worlds. world one is the broker and industry and world two is the merchant.

World one - it will be a commission issue and only a commission issue because their cost to acquire is to high because they are to manual. With deal size at play, some of this will be washed away upfront, but create a gap with less renewals.

World two - 80% of the time, the other 20% will have concerns with reporting to bureaus and the effect on debt to income and liquid credit scores.

I am a big fan of for better scoring merchants getting the acquisition cost low and extending turns and lowering cost. That being said, there will still be reasons even in the good credit world for the short term product as well.

I like the discussion, because I think the only way to solve it may be through innovation with ways to cut the cost of acquisition for even a basic singleton IC. I think this innovation is what is needed, I also think that the industry from bottom to top should not have its head in the sand about the innovation that they are starting to see from San Jose to San Fran. But I keep hearing oh less then 5% would get approved, yet I am seeing 30%. Acquisition cost rather it is long or short money through direct marketing or an ISO is about 8% give or take, and I am seeing it under 2%, to go that long and that cheap defaults will kill, but it is not, no way you can approve a deal that big for that price at that turn and do it that fast, yet it is being done.
As these guys scale what happens? Who knows, but for me it is not about planning 2014 and 15 - but beyond to 5 and 10 years and where do the current products, funders, ISOs, etc. fit in and how do you make sure you can last the long term.

Understanding how to blend the products with the various needs and the various acquisition cost across various distribution channels will be key. Even for ISOs.

One trick sales entities will get hurt or die, and consultative multi-product companies across the need spectrum I think survive - my 2cents