Like the payment networks, payment gateways will soon be dominated by a few big players: Stripe, Square I really wish digital currency (ETH, BTC) would take off in the main stream world. The amount of silent middlemen involved in paying a merchant with a credit/debit card is nauseating to say the least.
Square to acquire Afterpay for $29B
91–100 of 360 posts
Re: Square to acquire Afterpay for $29B
#92How does Afterpay make money if they do not charge interest?
Merchant fee (same as paid by a merchant when accepting a CC) which subsidizes the zero percent financing payment plan to the consumer.
They are in a regulatory blackhole, in Australia merchant fees are tightly regulated, cannot be more than actual processing cost. Many companies here charge more to pay bills by credit card or shops have minimum amount before credit cads are accepted. Moreover since Afterpay technically doesn't give consumer credit they are not bound by national credit rules as well. They don't and can't do credit checks
Re: Square to acquire Afterpay for $29B
#93As a foreigner in Australia, I can't help but to think that Australians really don't know how to handle finances and are too irresponsible to use a credit card, so Afterpay and Zip stepped in. Maybe it's because I grew up in Europe, but "Don't buy it if you can't afford it" has served me well. The majority of people I know just use credit cards for the perks but never miss a full payment.
Ironically, Klarna, a Swedish-founded company, is pretty big in the BNPL market according to https://www.marketwatch.com/story/the-buy-now-pay-later-wave... "In Sweden, home to BNPL provider Klarna, installments accounted for 23% of e-commerce transactions last year."
Sorry, I should have said Germany instead of Europe since the European market is pretty diverse.
The German word for debt is schuld(Schulden), which has the same meaning as guilt and is associated with something bad.
Re: Square to acquire Afterpay for $29B
#94Earlier quoted context omitted.
Australia has gone 20+ years without a recession, meaning many people have grown up without ever seeing anything except full employment and house prices going up up up. It's thus been a "safe bet" to leverage yourself up to your eyeballs to get on that "property ladder", and while many (including myself) thought this would finally pop last year with COVID, nope, after the briefest hiccup the property market has gone…
That's likely a combination of extra money being printed, maybe people doing more remotes and looking for better houses, government schemes to prop the house prices up (eg. by slashing taxes on property). There is still time for a pop once governments decide things are normal again after covid.
> There is still time for a pop once governments decide things are normal again after covid.
While thats true on its face, in practice trying to make that bet is a fools errand at this point. People have been telling me that for a decade plus, now. It still hasn't happened, and the Australian economy (and household wealth) is inextricable intertwined with real estate -- I can't see any government deciding to let it "pop", personally.
Re: Square to acquire Afterpay for $29B
#95Earlier quoted context omitted.
I’ve lived in Australia for 10 years and still cannot believe how flippant people here seem to about getting into debt. Tens of thousands of dollars of credit card debt, a mortgage covering 60% of a salary, and a leased car seem to be fairly standard for a lot of my peers. It feels like they’re all 3 missed months of salary away from having absolutely nothing. Obviously all anecdotal but still astounding and probably…
Other than mortgage (and HECS) nobody I know uses debt - Australians love second hand cars
So basically it's 90+% of debt for housing (scroll down to the pie chart):
https://www.finder.com.au/australias-personal-debt-reported-...
I'm including 'Investment debt' cause who are we kidding? It's all investment properties.
Re: Square to acquire Afterpay for $29B
#96Earlier quoted context omitted.
That's likely a combination of extra money being printed, maybe people doing more remotes and looking for better houses, government schemes to prop the house prices up (eg. by slashing taxes on property). There is still time for a pop once governments decide things are normal again after covid.
> There is still time for a pop once governments decide things are normal again after covid. While thats true on its face, in practice trying to make that bet is a fools errand at this point. People have been telling me that for a decade plus, now. It still hasn't happened, and the Australian economy (and household wealth) is inextricable intertwined with real estate -- I can't see any government deciding to let it "…
If you were to use one word to describe governance in Australia, it would be reactive.
They won't let it pop, but that doesn't mean it won't. Of course, timing it is the big bet, not predicting if it will happen.
Re: Square to acquire Afterpay for $29B
#97Earlier quoted context omitted.
Are Afterpay really to blame for this? Credit cards have been around since the 80s and are far more predatory. Pawnbrokers have been around for centuries. Even without debt, so many people have an impulse to spend as much as they can and put themselves in a financially precarious situation where one emergency bowls them over. I'm not saying Afterpay are ethical, but I'm sure you'd find a similar amount of people fore…
The problem is their target market is people who don't have (or can't get) a credit card. If you already have a credit card, whats the point of Afterpay?
> The problem is their target market is people who don't have (or can't get) a credit card.
Are you sure? Pretty much anyone with a job can get a ridiculously high credit limit.
>If you already have a credit card, whats the point of Afterpay?
Capped late fees, for one. Afterpay lets you impulse purchase things you can't afford but doesn't trap you on a neverending treadmill of servicing debt.
Re: Square to acquire Afterpay for $29B
#98Very sad to see this. I seriously expected Afterpay to become Australia's first $1t tech company.
Uh a payments company having Apple level value??
Re: Square to acquire Afterpay for $29B
#99Earlier quoted context omitted.
We're in a gigantic bubble
There have been tens of trillions of dollars and other currencies created from thin air the last year and a half. And more is being created currently. This isn’t just the US government. It’s basically all governments in the world. EDIT: Fed has been purchasing 120b of assets per month https://cheddar.com/media/federal-reserve-to-keep-up-asset-p... Federal government has spent at least 3.5 trillion on COVID-19. EDIT2:…
I said that the other day and someone just replied snarkly "Trickle up economics".
That's like saying Thermodynamics is trickle up Chemistry. There is value in looking at macro-ecomonic concepts especially when it comes to government spending, federal reserve interest rates and inflation.
Re: Square to acquire Afterpay for $29B
#100Earlier quoted context omitted.
Merchant fee (same as paid by a merchant when accepting a CC) which subsidizes the zero percent financing payment plan to the consumer.
Just to expand upon what the parent said, their fee is significantly higher than the companies that just process credit cards (around 6% compared to the industry standard rate of 2.9%). I believe they eat the loss when the customer defaults, though.
Oh boy...so this 6% fee is then indirectly passed onto consumers.