161–170 of 360 posts
Why couldn't they roll out their own competitior? Wouldn't that be a lot cheaper? I guess much more difficult to expand in the Aus market?
In Australia millennials, are allergic to credit cards. Credit card usage in that demographic is really low. Instead they prefer BNPL services as a credit mechanism. Banks have also responded and offer credit cards that don’t act like normal credit cards[1] [1] https://www.commbank.com.au/credit-cards/commbank-neo.html
Interesting product from CBA. Doesn't afterpay act more like a loan? From looking at this it looks like CBA is trying to get people to splash their money and manage the payback themselves. Those management fee's are also based on the idea you can get the card paid off in the month (CBA also use a rolling bill day. so they have a 30 day month and a 25 day payment period for that month. And those details are pretty opa…
Yes the chunking into 4 payments, is the primary benefit of BNPL. It allows you to buy something significant (i.e. a laptop) and spread the payments over time.
The downside is its very easy to overspend and get stuck in a debt spiral
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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…
I think you're underselling Sydney a bit there - there is a google campus, Atlassian, and a lot of finance companies offering high salaries. Not SV level, but pretty close. Melbourne is pretty decent for high end tech jobs, but not as good as Sydney. Certainly real estate is extremely expensive and broken, but it's not like New Zealand where the real estate is almost as expensive but the pay is much lower. I had to l…
How close? let's say AUD 300k (I'm honestly curious, does Optiver/Atlassian/Google even pay that much here?) which is a mind-blowing salary in Australia, tops all kinds of taxes, it converts to USD 220K give or take, adjusted for higher taxes and cost of living, down to about 200k.
So a top earner 0.1% in Sydney makes as much as a strong 3 yoe engineer in America.
In Australia millennials, are allergic to credit cards. Credit card usage in that demographic is really low. Instead they prefer BNPL services as a credit mechanism. Banks have also responded and offer credit cards that don’t act like normal credit cards[1] [1] https://www.commbank.com.au/credit-cards/commbank-neo.html
I'm an early 20s Kiwi zoomer, so somewhat similar demographic. I don't have a credit card and see no point in it. I use a debit card for everything. I don't think most of my friends have credit cards either, but maybe they do and I don't notice.
I know some debit cards are getting closer to credit cards in these areas but at least when I first got one, they were just plastic cash. You spend it you lose it, the bank won't support you with clawing it back.
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This is obviously country specific and I don't know anything about the banking/payment environment in NZ, but here in the US credit cards offer a ton of benefit to consumers, so much so that it's almost always stupid to not use one.
In Australia (Afterpay's home market), credit card merchant fees are tightly regulated ( Airline/Frequent Flyer point conversions similarly got nerfed, so much so it's better to cycle cards (credit worthiness permitting) every year to get a point bonus up front (e.g 200K points for spending $X000 in the first 3 months) than trying to earn that amount.
I bought a pair of speakers costing $2500. I tried to reach to the company for a return but no one would answer. No phone, no email, nada. 1 month return deadline was coming up and I called American Express. Within literally 10 mins (no wait at all), I filed a claim and was done with it. 60 days later, I got the money back. Turns out that they couldn't reach them either.
Credit cards are more consumer centric than merchant centric and they're a huge boon to otherwise rampant asshole behavior from merchants. I also run an online shop and its a pain in the neck when someome files a charge-back, we just consider it as part of the cost of doing business.
In last 20 or so years of using an AMEX card, I've filed half a dozen charge backs. It's an amazing company, it's better than any other CC company in my opinion. They also have one of the highest fees and it shows why - their customer service is absolutely top notch - red carpet, the works.
Very sad to see this. I seriously expected Afterpay to become Australia's first $1t tech company.
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It's rather paternalistic to assume poor people can't handle credit.
Are you kidding? Poor people of course cannot handle credit, because they don't have the cashflow or savings to prevent the use of credit in disadvantageous situations. I am not saying poor people shouldn't have credit, I am saying credit is most destructive for poorer people, and so any service that targets that market is exploitative of their misfortune.
That starts you down a very slippery slope of what other things poor people supposedly can't handle, because of course you know what's best for them.
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> 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.
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 savv…
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 savv…
Customers love using Afterpay, they search on Afterpay for products they want, and are redirected to her store. Online sales went from being essentially no part of her business to being 75% of her sales, and are probably the only reason her business survived the pandemic.
She has no problem with the fact that she needs to pay commission fees to Afterpay - it's a tiny fraction of the (unprofitable) amount that she would have to spend on advertising to achieve the same amount of sales.