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Square to acquire Afterpay for $29B

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Re: Square to acquire Afterpay for $29B

#261

Post by refurb »

matkoniecz wrote: post #206
systemvoltage wrote: post #165

Earlier quoted context omitted.

That's not the main benefit of using a credit card. The primary benefit of a CC is decoupling it from your bank account - if there is an issue, CC company will fight the charge for you and almost always side on your side. 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…

Then why not us debit card? Chargebacks are also available and risk of ending with spiral of debt is removed. (Yes, it is a real risk. Yes I know that you and me are not going to e so stupid. But I am not trusting this belief.)

If someone fraudulently or mistakenly charges my debit card $5,000, that's $5,000 gone from my bank account until I get it fixed.

If someone charges $5,000 to my credit card in error, I've got 30+ days plus to resolve with zero financial impact to me. If it doesn't get resolved in that time, I have the option to not pay the bill (or that portion of the bill), knowing that if the error is fixed, the penalties and interest will be waived.

Re: Square to acquire Afterpay for $29B

#262

Post by chrisseaton »

systemvoltage wrote: post #101
chrisseaton wrote: post #59

Earlier quoted context omitted.

Being more charitable, I think it's marketed as a way for people who budget monthly to spread their charges.

The point is that if they're stretching payments over multiple weeks/months then they can't afford it.

What is your logic behind that?

Re: Square to acquire Afterpay for $29B

#263

Post by mrweasel »

hnick wrote: post #164
ZephyrBlu wrote: post #135

Earlier quoted context omitted.

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.

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.

You can do chargebacks on debitcards and you've been able to for at least 20 years.

Some banks might ask you to contact a merchant before trying a chargeback, but if you don't get your money back the bank will either do a chargeback or cover the cost (as they do with fraud).

Re: Square to acquire Afterpay for $29B

#264

Post by danpalmer »

gonzo41 wrote: post #141
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

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…

> Doesn't afterpay act more like a loan?

Yep. Buy-now-pay-later services are just short term loan providers. Part of what they're selling to merchants is the fact they are regulated as lenders. We use Klarna in the UK to offer BNPL for exactly this reason, even though we could likely offer it ourselves.

Re: Square to acquire Afterpay for $29B

#265

Post by gizmo »

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?

What matters is the amount of money in active circulation. If salaries all went up 4x then you’d see significant inflation across the board. The fed provides extra liquidity to banks which trickles down to the financial system, which makes stocks go up, and real estate to some extent, but it doesn’t boost the entire economy. Doing 1tn of QE and borrowing 1tn for shovel ready infrastructure spending are not equivalent.

Inflation always lags behind, though, and it’s pretty likely at this point that rising inflation indicators in the coming quarters force the fed to tighten. Opinions are very much divided on this, where many are convinced the fed needs to take drastic action to keep inflation from getting out of control with another financial crisis as a result. The other mainstream view is that we’re only seeing transitory inflation right now and as long as the real economy is healthy we shouldn’t expect inflation to persist and cause carnage.

Re: Square to acquire Afterpay for $29B

#266

Post by AniseAbyss »

Sander_Marechal wrote: post #239
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 Dutch here. We don't have points or cashback. Purchases are insured with standard bank debit payments as well, as are chargebacks. I do own a credit card but that is purely for the occasional (usually US) webshop that doesn't accept European debit cards, or as a backup payment method on vacation (my debit card once broke on vacation and my family had to send me money through…

Also you are paying for that insurance. People don't really dig into just how expensive creditcards really are because in many countries it's really the only way to pay for things online.

The only time I ever use a CC is when I'm dealing with an American company- because it's either CC or PayPal with them.

Re: Square to acquire Afterpay for $29B

#267

Post by danpalmer »

ttam wrote: post #90
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.

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."

Klarna is huge in the UK too.

I'm inclined to believe another commenter who suggested that millennials and younger don't really like credit cards, and this is a different way to get a similar thing – better cash flow.

Re: Square to acquire Afterpay for $29B

#268

Post by pitterpatter »

kiwijamo wrote: post #197
yardstick wrote: post #180

Earlier quoted context omitted.

It’s a shame the NZ market hates credit cards so much. In the UK they are widely accepted - as in I struggle to think of a shop that didn’t accept them. Including dairies and food trucks (thanks Square!). Btw I find it weird that EFTPOS cards have no annual fee, but debit cards do, but some credit cards don’t (eg ASB Visa Light has no ongoing fees). I sometimes have to pay £1 via card when in a shop activating a serv…

In New Zealand, the local EFTPOS network is basically a home-grown network that the major NZ banks established in the 1980s's and have continued operating on a shoe-string budget ever since. For the most part merchants only have to pay a low fixed cost to access the network, whereas customers usually don't pay a fee (as most banks either bundle free EFTPOS transactions in a fixed monthly fee package or even offer it…

>In New Zealand, the local EFTPOS network is basically a home-grown network that the major NZ banks established in the 1980s's and have continued operating on a shoe-string budget ever since. For the most part merchants only have to pay a low fixed cost to access the network, whereas customers usually don't pay a fee (as most banks either bundle free EFTPOS transactions in a fixed monthly fee package or even offer it for free entirely for certain account products).

Sounds exactly like Interac in Canada. Although nowadays I believe most if not all Interac debit cards are also co-branded as MasterCard/Visa debit. Which makes em usable online as well. (There is a Interac online but only a small small small handful of sites even support it.)

Re: Square to acquire Afterpay for $29B

#269

Post by blueblisters »

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?

I believe that's partially because that money is a liability on someone's balance sheet - the fed, the banks, the treasury, companies, consumers etc. As long as the Fed can use its levers to mop up excess liquidity sometime in the future, the excess money supply is not too much of a concern.

Re: Square to acquire Afterpay for $29B

#270

Post by mcintyre1994 »

dangrossman wrote: post #37
jtsiskin wrote: post #33

“Shop now. Pay over 6 weeks.” How is this technically different from a credit card? Just a longer timer period?

No interest, no credit check, late fees are capped, and it won't ever ding your interest rate or credit history if you do miss a payment.

At least in the UK they do reserve the right to file missed/late payments with credit reference agencies FWIW.
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