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Square to acquire Afterpay for $29B

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Re: Square to acquire Afterpay for $29B

#121

Post by shell0x »

pcurve wrote: post #113
siquick wrote: post #70

Earlier 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…

Sounds 100% like America. :-/

I'm not American, so I have less insight than you perhaps, but I'd say America is much more affordable than Australia. In Australia most jobs are in Sydney and Melbourne. Perth is mostly for mining and Brisbane doesn't have many tech jobs.

Real estate prices in Sydney and Melbourne are in the million(s), but incomes are ~100+k AUD. Some people earn 200k+ as a principal engineer, but that's pretty much it.

In America you have much more cities where you can find a decent job and different lifestyle. If New York is too expensive, you can move to Raleigh, NC. I don't think that exists in Australia.

There is also a very low degree of innovation in Australia, it's all related to real estate and mining.

Personally I just feel like it's not worth building a life here unless you get a large inheritance, but for an immigrant, America is a much better place to build a future.

Re: Square to acquire Afterpay for $29B

#122

Post by AussieWog93 »

roenxi wrote: post #112
AussieWog93 wrote: post #102

Earlier quoted context omitted.

Yep. To be fair, so are the (lower, but non-zero) fees from Visa/MasterCard/Amex/PayPal. It's a textbook example of an externality.

The fee is paid by the customer. It isn't an externality. An externality is when the cost is paid by someone who isn't party to the transaction.

>The fee is paid by the customer.

No it isn't. It's literally against their TOS for merchants to add on a surcharge for using Afterpay.

Re: Square to acquire Afterpay for $29B

#123

Post by [deleted] »

jollybean wrote: post #115
vmception wrote: post #61

Earlier quoted context omitted.

Kind of? If you follow monetary policy circles, you would know that we are only close to the predicted level of fantastic market distortions that should be expected. It is fantastic to see it play out, such as valuations much larger than before, as well as the unexpected areas of speculation and shifts in market tolerances for worse deals. But we aren't even done yet! And this comes with a pretty clear agreement on t…

+1. This is the real comment about the situation, because the valuation is so 'ridiculous', it almost makes the nature of the business activity secondary. For non-financial folks, dust off the little equation you may have learned in high school, where you value something that goes out forever, but where the rate of growth is higher than that of inflation and the risk-free cost of capital. It goes to infinity. So as i…

[deleted]

Re: Square to acquire Afterpay for $29B

#124

Post by retreatguru »

jjeaff wrote: post #120
55555 wrote: post #107

Earlier quoted context omitted.

> My merchant account is cheap (interchange plus 0.1% or so) and the gateway they set me up on is Authorize.net It's crazy most people don't know you can get this. Seems like every popular merchant account provider is a bad deal in comparison. For those curious, you get it from banks. Open a company account at a major conventional bank then ask them for a merchant account. The default they offer you is interchange +…

I have never been able to get interchange plus just 0.1 or 0.2%. Is anyone getting this for SaaS? It seems many processors consider digital goods or services like software to be more risky.

We get interchange +0.1% but we are in travel and because of the various card types used (gold, platinum, etc) sometimes it’s just a tiny bit cheaper than 2.9%. For example 2.7%. It all depends on card types people use.

Re: Square to acquire Afterpay for $29B

#125

Post by azemetre »

scrollaway wrote: post #68
RichEO wrote: post #46

Earlier quoted context omitted.

It’s Twitter

Care to elaborate?

Oh man, I would have honestly said Square. Product development at Square seems to be way way better than Twitter, compare the last 3-years between the two.

Twitter hasn't really done much with it's platform, they never really done much with monetization and other platforms are eating into their space (patreon, onlyfans, substack). I mean they literally invented tiktok before tiktok with Vine and that acquisition just floundered into dust.

Juxtaposed to Square, that has done really interesting purchases like Tidal, Crew, Kredit Karma, Weebly. They are definitely moving in a directed one-stop finance and collaboration shop. I think they're one of the more innovative fintech companies that have been making tremendous ground over the last decade.

Re: Square to acquire Afterpay for $29B

#126

Post by jeeeb »

siquick wrote: post #70
shell0x wrote: post #58

As 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.

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…

The flip side of this is that:

1. As long as your LVR isn’t too high your interest payments on a home loan will probably come in well below what renting an equivalent house would cost. Further rent will generally rise over time with inflation, whereas your interest will decrease to zero over time as you pay down the loan.

2. If you’ve got a home loan with a 100% offset account (very, very common in Australia) then a credit card makes financial sense. I purchase everything on credit and pay the full balance each month. I pay no interest, earn points and this maximises the amount of money in my offset account at any one time.

3. Depending on your usage and tax situation a noveated lease (car lease) can make good financial sense.

Re: Square to acquire Afterpay for $29B

#127

Post by izolate »

pylon wrote: post #20

As a customer are there any downsides to using these BNPL platforms when I'm buying something? I generally never buy anything online that I can't afford to pay for it outright so I have never used them before.

Yes. Sometimes a store will offer free returns when paying directly, but not when the item was bought through BNPL.

Pay it outright, if you can. It's usually the best way.

Re: Square to acquire Afterpay for $29B

#128

Post by geekpowa »

Afterpay's business model relies on high merchant fees which merchants, under their merchant agreement, are not allowed to pass onto their customers. So from customers point of view, afterpay often appears to be cheaper than other payment channels such as credit card / paypal.

Afterpay roll into a new merchant, cannibalise existing payment systems and at leat for the low margin merchants I work with, who are not savvy enough to look at their own sales data, their business becomes less profitable.

Their whole business model is deeply unethical IMO, harms merchants and harms customers who do not use Afterpay as merchants have to amortize cost of business across all their customers. The Australian regulator dropper the ball last year when considering legislation to align Afterpay with credit card instruments on this issue. Eventually regulators will realise this is harmful behaviour and align things correctly.

Re: Square to acquire Afterpay for $29B

#129

Post by mikeryan »

hn_throwaway_99 wrote: post #26

I've just come to accept that I'll never understand corporate finance. Based on the data I could find, this works out to a sales price of about 76 times revenue for Afterpay. Even for a fast growing company, how can they ever grow into that valuation? Of course, it's an all stock deal, so perhaps it's better to just consider what percentage of Square they're giving to Afterpay stockholders, but I still just can't wra…

Even in the Release I was shaking my head. They have 100,000 merchants that seems tiny? I could understand buying market share but at some point don’t you think Someone could tell Jack “hey we can probably build this feature for a few bucks less than $1B. Might take a year or so but we can save a few bucks maybe”

I mean at some point don’t you have t

Re: Square to acquire Afterpay for $29B

#130

Post by muzani »

BugsJustFindMe wrote: post #47

Every time I see one of these announcements, the valuations go up and up and up and up. I remember not long ago being wowed by a 1B acquisition. That was called a unicorn because of how incredible it was. And now we're at 29B. Is this just because money is all a joke?

Yeah, I think the "unicorn" bar needs to be pushed up to $10B at least, because of inflation. It's very rare though, but fintech seems to hit it frequently.

Perhaps finance people have less money raising money. Or perhaps people are more willing to pay for things that save/make money.

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