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The 'buy now, pay later' bubble is about to burst

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Re: The 'buy now, pay later' bubble is about to burst

#231

Post by yurishimo »

customname wrote: post #185
vel0city wrote: post #168

Earlier quoted context omitted.

I imagine there are a number of those out there, but I've taken many BNPL deals that were zero fee, zero interest. It truly worked out to be the exact same cost whether I paid upfront or took the BNPL. I imagine the BNPL people made their money from the same kind of CC fee models and from customers who ended up not being able to stay within the 0% timeline. From my memory it usually had some big fines or interest rat…

I always imagined that the companies using the service at checkout would give the BNPL company a percentage of the sale if the customer used the service. Even if the price is the same for the consumer, BNPL companies could argue that they generated sales that might've backed out had they not been available.

This is exactly how they work. I work for an ecommerce company that offers one of these services. We pay them a small percentage and they take on the liability to collect payment and handle disputes. We already pay another percentage to try and detect fraud for a certain amount of our transactions. By letting the BNPL company act as the purchaser on behalf of the customer, we can offer them a cut of what we would have paid for fraud detection.

Re: The 'buy now, pay later' bubble is about to burst

#232

Post by snotrockets »

customname wrote: post #185
vel0city wrote: post #168

Earlier quoted context omitted.

I imagine there are a number of those out there, but I've taken many BNPL deals that were zero fee, zero interest. It truly worked out to be the exact same cost whether I paid upfront or took the BNPL. I imagine the BNPL people made their money from the same kind of CC fee models and from customers who ended up not being able to stay within the 0% timeline. From my memory it usually had some big fines or interest rat…

I always imagined that the companies using the service at checkout would give the BNPL company a percentage of the sale if the customer used the service. Even if the price is the same for the consumer, BNPL companies could argue that they generated sales that might've backed out had they not been available.

Exactly. The retailer pays the interest (a small marketing cost to increase customer spend), which is made into an offering to financiers of a low risk loan trenches, with absurdly high interest rate (20%+ APR).

Re: The 'buy now, pay later' bubble is about to burst

#233

Post by nullsense »

sumtechguy wrote: post #149
nullsense wrote: post #104

Earlier quoted context omitted.

>Someone who is financially disciplined is leaving money on the table when not using CCs. The trick is knowing whether or not you're financially disciplined. And usually one finds out the hard way. It often involves a credit card or credit facility of some nature.

This here. Not everyone can do that. I personally can. I try to teach my friends and family to save a bit and use credit cards as a tool to get a small bit of free stuff. However, those things are deadly if you have no skill in saving in the first place. They will wipe you out with interest payments and then some. That method only works if you have the ability to save first and put off impulse buys. Even having somet…

I think the ability to manage money well and not get screwed over by credit facilities is highly correlated with ones level of trait conscientiousness. It's less about skills per se than it is about that particular trait. I would wager those high in trait conscientiousness naturally tend towards frugality and budgeting and those low in trait conscientiousness tend towards impulse buys and poor financial planning.

My wife is 99th percentile for trait conscientiousness and I'm 1st percentile. I'm amazed at the amount of money she's able to save and her level of discipline and she's generally gobsmacked at the amount of money I waste and the random shit I buy.

Having the information about what one should or shouldn't do is only part of the equation. 8t also needs to be something you can apply, and sadly some of us just can't.

Re: The 'buy now, pay later' bubble is about to burst

#234

Post by snotrockets »

CyanLite2 wrote: post #111
sbuccini wrote: post #71

I posted this before, will post again: This article is so weak. It doesn't provide any actual reasons for why BNPL is a bubble nor why such a supposed bubble is about to burst. Seriously quotes TikTokers who are probably just paid shills for the company. There are real issues with BNPL, mostly extremely loose underwriting in the pursuit of growth, but realistically it's functionally no different than a credit card. P…

BNPL is just a non-asset-backed sub-prime loan. We've seen this movie before and how it ends. BNPL firms can't survive a recession or higher consumer delinquencies.

LoanS. And most are small and very short term (4 payments). The risk from defaults isn't as worse as for a auto-loan lender, or a mortgage lender, or even a CC lender (as underwriting is done on a per-purchase base, the total amount underwritten per user is much smaller than a typical CC)

Re: The 'buy now, pay later' bubble is about to burst

#235

Post by dfinninger »

subarctic wrote: post #191
Olphs wrote: post #157

Earlier quoted context omitted.

Credit cards are used in Europe too, but the credit part not so much, most people pay it in full end of month (or whenever their next bill comes)

Isn't that how most people use their credit cards everywhere, or at least everywhere in the developed world? I thought the 20%+ interest was just a way to take advantage of you if you mess up and rack up too big a bill, or forget to pay your bill.

Anecdata, but I know multiple people that I associate with do caray a balance on their cards and by paying minimums. I don’t understand it, but then again I’m fortunate enough to have a software job that allows me to keep up with my social lifestyle without incurring debt.

Re: The 'buy now, pay later' bubble is about to burst

#236

Post by StanislavPetrov »

t0mas88 wrote: post #44
geraldwhen wrote: post #28

Earlier quoted context omitted.

This is wild. Have you never had a fraud charge? Reversing fraud of any size takes minutes at most with a credit card. With a debit card you might just lose the money.

This is a very US specific thing and even there I'm not sure it's true. In Europe credit-card usage is much lower, and card security is much higher for both types of cards. We've had chip and pin protected cards for many many years, while the US only caught on in the last few years. Is there objective data that US debit cards have more fraud impact for their users? Or is this really more a PR story from credit card c…

>Is there objective data that US debit cards have more fraud impact for their users?

Debit card fraud is rampant here in the USA. I cannot think of anyone I know personally who has not been a victim of debit and credit card fraud at least once (most have been hit multiple times). The difference usually is that in the case of credit card fraud, you go to charge something, and your card doesn't work. You call up only to find out your credit card has been frozen due to a pattern of suspicious purchasing behavior in some distant state. Credit card companies are very diligent about this because it is their money on the line. When it comes to debit card fraud you only find out about it when you check your account and see your balance decimated or a list of phony charges that you didn't authorize. In the case of credit cards, you aren't responsible for paying the phony charges. In the case of debit cards, you are usually just out the money. It is very common here.

Re: The 'buy now, pay later' bubble is about to burst

#237

Post by puffoflogic »

mywittyname wrote: post #102
dusted wrote: post #3

I don't get it.. There's a childrens song in Denmark, it's lyrics go, roughly translated "and if you have money, then you can have, but have you none, then you may go!" (it's about buying bread at the bakery).. When I see how people spend money they don't have, I'm always wondering if their parents never sang for them when they were young, or if they are of a particular dim nature. Sure, I can see why some people wou…

I'll be honest with you, it sounds like you've lead a pretty sheltered life. Living in poverty is fucking hard. All around you are parasites looking to take what little you have and kick you back to the floor. Yeah, of course parents tell their kids to do better in life. But it feels like the world is conspiring against you at every step of the way. The only time anything good happens, it's due to the kindness of som…

Parasites like... BNPL schemes?

"Everyone is ready to take money from poor people and that's why your racist (or whatever) if you don't let poor people give their money to people ready to take it from them!!!1!"

Also the notion that successful people should not be giving advice to people who are less successful, because then... what, the less successful people might become more like the successful people? -- anyways, that notion is completely backward. One could only endorse it if one really wanted the less successful people to remain down in life.

Re: The 'buy now, pay later' bubble is about to burst

#238

Post by tarotuser »

balozi wrote: post #179
tarotuser wrote: post #87

What happens if you agree to a BNPL but you BNDP (buy now, dont pay): https://www.consumerfinance.gov/ask-cfpb/what-happens-if-i-c... Hidden costs of BNPLs: https://slate.com/technology/2022/11/buy-now-pay-later-hidde... "I’m sure you’ve read a ton of stories that Gen Z is using “buy now, pay later,” all the time. The most recent Consumer Financial Protection Bureau pointed out that actually the biggest age cohort fo…

On a philosophical tangent, if you BNDP (buy now, don't pay), did you actually buy it? If you did indeed buy it, who did you buy it from - the original vendor or the party you didn't pay? We may need new language for the times we are living in.

Id daresay that what you asked isn't philosophical, but legal. And from what I gather, yes, it is a sale. And if you don't pay, they ding your credit. Hard.

And low/no credit people can't even use these services.

But to the larger point, there's a lot of things that claim to be a sale, but aren't really. I'm especially thinking of DRM music, movies, software, and generally copyrighted goods like that. Those folks are sure addicted to using the language of "sale" and then removing as they choose whatever they wish.

Re: The 'buy now, pay later' bubble is about to burst

#239

Post by viraptor »

thecleaner wrote: post #200
nibbleshifter wrote: post #192

Earlier quoted context omitted.

Makes the Americans feel bad. I don't think Americans understand that their credit card rewards/etc simply don't exist in Europe. There is literally no reason for me to ever use a credit card, it just costs me money.

From Europe. Genuinely never used anything other than the card provided by the bank. But there are some nefarious companies which require a SEPA mandate for recurring deductions and make it hard to cancel. I also have my reservations about always using a card directly linked to my bank account but so far so good.

Yeah, it can get problematic. I got into some infinite loop of a plane ticket system one day. They charged me around £800 per iteration continuously until the charges got rejected.

It got reverted within a day or so, but having your current account wiped without knowing when will it get resolved and whether any money you put back there will disappear as well is not a great situation to be in. Having at least two different accounts in that case is good.

Re: The 'buy now, pay later' bubble is about to burst

#240

Post by rgmerk »

yalogin wrote: post #142

What is the argument against BNPL? It’s like credit cards isn’t it? Instead of borrowing from credit card companies some folks are borrowing from the BNPL companies. Is the worry that these people are over extended? Is there over exuberance in n that space and no checks on who to lend money and how much?

BNPL is basically an attempt to avoid the limits on merchant fees, cross-subsidised by everyone who isn’t using BNPL.

The whole industry can get a ticket on Golgafrinchan ark C as far as I am concerned.

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