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Square to acquire Afterpay for $29B

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Re: Square to acquire Afterpay for $29B

#241

Post by dannyw »

daniel-grigg wrote: post #131
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.

Being responsible is a tough call give that institutions in Australia charge enormous interest rates on credit cards, typically 20%+. I find it staggering that they can get away with it actually. Regardless, many (less ‘responsible’) consumers get burnt by this and spend years paying down debts, so I’m not surprised these BNPL players have seen such success. Also they’ve done well appealing with younger consumers. Ho…

For the first couple years of operation afterpay had no credit checks and no identity checks.

Re: Square to acquire Afterpay for $29B

#242

Post by shell0x »

ZephyrBlu wrote: post #135
Khaine wrote: post #132

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.

When I lived in Singapore, I got an American Express cashback card with 3% cashback on the first $5000 and 1.5% unlimited cashback for everything > $5000. They waived the annual fee and there was no minimum spend.

Another card(the annual fee got waived too) gave me free access to the airport lounge in Dubai, which was great, because I could get a free meal, free drinks, and take a shower during my layover.

Re: Square to acquire Afterpay for $29B

#243

Post by adventured »

rwmj wrote: post #219
J253 wrote: post #144

Earlier quoted context omitted.

> I don’t have a credit card and see no point in it. If you use a credit card like a debit card (pay it off in full every month) it can be rewarding depending on the card. I make $75-$100 cash back every month on my credit card.

Where does the $75-$100 come from? Is it that prices are generally more expensive, or is it a transfer from people who get into terrible debt?

US card transaction processing fees are higher than in most peer nations. That creates a nice profit stream in the credit card industry in the US, which largely doesn't exist eg in Europe. It funds the points & benefits systems that cards offer here.

It's how Visa ($540 billion market cap) can be worth more than the world's most valuable banks (eg JPMorgan $453 billion), and has an almost unbelievable 64% operating income margin ($14.6b operating income on $22.6b sales). Visa has one of the greatest businesses ever conceived, it's almost nothing more than an intangible floating brand toll bridge (they do operate an enormous global processing network, their primary cost center).

And then there's Mastercard, worth $380 billion. And American Express, worth $135 billion.

It's how Capital One - a credit card issuing company in the US - can be worth more than Barclays and Deutsche Bank combined.

HSBC is a giant for example, the second largest bank by assets in Europe, and is worth $113 billion.

And although some might jump to the conclusion that Americans must be drowning in credit card debt, that's not the case. US household finances are in decent shape and have been for most of the past decade. The ratios of household debt and debt service payments vs disposable income remains at historic lows (lower than 50 years ago). US household debt as a total sum hasn't increased in the past 20 years inflation adjusted. It's the processing fees that keep the card industry thriving. The switch from cash to cards for everything here was a bonanza for the industry.

Re: Square to acquire Afterpay for $29B

#244

Post by depereo »

ZephyrBlu wrote: post #174
hnick wrote: post #164

Earlier quoted context omitted.

Insurance, points, cashback, chargebacks. It's also a one month interest free float of your funds if you pay in full each month, meaning you earn some interest. 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.

> Insurance, points, cashback, chargebacks The first 3 don't really seem to exist in relation to CCs in NZ, and wanting/needing to do a chargeback seems unlikely. There are probably mild benefits to me having a CC over a debit card in NZ, but it doesn't seem to be anything like the US.

In NZ there are some solid benefits to paying with a CC - I generally toss a direct-debit authority to pay it off automatically monthly.

I've got reasonable travel insurance protections when I pay with the CC, I get airpoints, and some chargeback options, as well as fraud detection. Additionally, it's been easier and more reliable to set up online payments with a credit card.

Re: Square to acquire Afterpay for $29B

#245

Post by valzam »

dannyw wrote: post #238
valzam wrote: post #204

Earlier quoted context omitted.

Except that Australia doesn't have a broken migration system so actually getting a visa is much easier. Also no broken healthcare system, gun laws or student loan crisis. I'd rather raise a family in Australia than America.

Ding ding ding. Much easier to get family migration visas too. Multiculturalism is a lot better than other comparable nations. Think of house prices as reflecting the "price of living in Australia".

Ironically, Australians have access to a special kind of visa that allows them to migrate very easily to the US, with work rights for your spouse and everything!

https://en.m.wikipedia.org/wiki/E-3_visa

Re: Square to acquire Afterpay for $29B

#246

Post by adventured »

jl6 wrote: post #209
JohnJamesRambo wrote: post #188

Earlier quoted context omitted.

Yes money is all a joke right now. https://fred.stlouisfed.org/series/M1SL

Can someone explain why x4’ing the money supply hasn’t ÷4’d the value of the dollar? Yet?

Because the money supply didn't increase 4x. They changed the definition of M1 to include savings.

Re: Square to acquire Afterpay for $29B

#248

Post by shoto_io »

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?

Facebook acquired Instagram for 1bn. Ridiculous by today's standards.

Re: Square to acquire Afterpay for $29B

#249

Post by mrtksn »

shoto_io wrote: post #248
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?

Facebook acquired Instagram for 1bn. Ridiculous by today's standards.

I remember the jokes about how FB purchased a photo filter app and how easy it was to make photo effects. Sometimes it feels like techies not always get what is valuable and what is not as much.

Re: Square to acquire Afterpay for $29B

#250

Post by TheAlchemist »

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?

Notice that it’s all stock - no real money is changing hands here.

All assets are at all time highs - bubble levels for most. Hence those « valuations » - but if history repeats itself, things can change quickly.

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