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Capital One to acquire Brex for $5.15B

reuters.com

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Re: Capital One to acquire Brex for $5.15B

#81

Post by Twisol »

Sn0wCoder wrote: post #77
apazzolini wrote: post #68

Earlier quoted context omitted.

Because you're leaving 2-3% on the table for every transaction. Using a credit card doesn't mean you can't pay it off in full every month, costing you zero in interest, while taking advantage of reward programs.

You do realize that 2-4% is not left on the 'table' its taken from the merchant you are shopping at. If you are at a big box store sure but when going to local merchants its best for them if you use debit or cash. One could argue the merchant 'choose' to accept CC but in this day and age its more like extortion because the CC lobbyist were able to make it illegal to pass that charge onto the customer.

I had this thought as well. I didn't want to raise it myself, because I don't have any personal evidence that this is the case, but of course the "cash back" has to come from somewhere.

Re: Capital One to acquire Brex for $5.15B

#82

Post by steveBK123 »

Twisol wrote: post #67
weird-eye-issue wrote: post #63

Earlier quoted context omitted.

Who in the world uses debit cards

Setting your incredulity aside, I'm curious why you think using a debit card would be so shocking. I effectively don't use a credit card at all: I use a debit card (or an equivalent Apple Pay representation thereof) exclusively. From my perspective, if I want something and I have the money, I'll pay for it. If I want something and I don't have the money, I won't pay for it. I don't often want things outside my budget…

You are young, you want to use a credit card to protect yourself and build credit history.

Using a debit card, in the event of fraudulent charges, the money is already gone from your bank account and now you are negotiating with your bank to get it back. With a credit card, you file the claim and its generally resolved before your statement closes and anything is due. Your card will also be immediately cancelled, so if its your debit card you will lose ATM access while awaiting the new card.

This will happen to you many times over the course of your lifetime, maybe every 5-10 years. Usually when a number is stolen, they speed run getting as many $1000s of charges in before the card is stopped, which would drain your debit card account.

Credit history is also important. If you don’t have a credit card and build basic credit history before your first job, you will have trouble signing a lease without a parental guarantor.

Re: Capital One to acquire Brex for $5.15B

#83

Post by 0xTJ »

weird-eye-issue wrote: post #63
LgWoodenBadger wrote: post #35

Capitalone is going to need something to make up for switching all their debit cards from MasterCard to Discover

Who in the world uses debit cards

I use mine at Costco for purchases over $300 (limit for tap). At least here in Canada, they only accept Mastercard, not Visa, and I don't remember the PIN for my Mastercard.

Re: Capital One to acquire Brex for $5.15B

#84

Post by cosmic_cheese »

ipsento606 wrote: post #78
Twisol wrote: post #67

Earlier quoted context omitted.

Setting your incredulity aside, I'm curious why you think using a debit card would be so shocking. I effectively don't use a credit card at all: I use a debit card (or an equivalent Apple Pay representation thereof) exclusively. From my perspective, if I want something and I have the money, I'll pay for it. If I want something and I don't have the money, I won't pay for it. I don't often want things outside my budget…

Credit cards are many products rolled into one. Despite the name, many people use "credit cards" simply for rewards and enhanced purchase protections, with only incidental use of the credit facility. In the US market, it is surprising that someone would choose to use a debit card over a credit card (if they have the choice) because they are giving up the rewards and enhanced purchase protections, which are available…

Better fraud protection, too. Depending on the bank it can be a real battle to get fraudulent charges dropped and funds restored, but credit card companies go out of their way to make that process easy. Some even offer it as a function of their site/app so you don’t even need to make a call to get things resolved.

I have several cards and don’t keep a balance on any of them. They’re a tool with several uses, and one of mine is to be able to pay for things without exposing my debit card/bank account.

Re: Capital One to acquire Brex for $5.15B

#85

Post by direwolf20 »

Sn0wCoder wrote: post #77
apazzolini wrote: post #68

Earlier quoted context omitted.

Because you're leaving 2-3% on the table for every transaction. Using a credit card doesn't mean you can't pay it off in full every month, costing you zero in interest, while taking advantage of reward programs.

You do realize that 2-4% is not left on the 'table' its taken from the merchant you are shopping at. If you are at a big box store sure but when going to local merchants its best for them if you use debit or cash. One could argue the merchant 'choose' to accept CC but in this day and age its more like extortion because the CC lobbyist were able to make it illegal to pass that charge onto the customer.

In some countries they simply outlawed such high fees, merchants pay lower fees and there's no cashback.

Re: Capital One to acquire Brex for $5.15B

#86

Post by Twisol »

steveBK123 wrote: post #82
Twisol wrote: post #67

Earlier quoted context omitted.

Setting your incredulity aside, I'm curious why you think using a debit card would be so shocking. I effectively don't use a credit card at all: I use a debit card (or an equivalent Apple Pay representation thereof) exclusively. From my perspective, if I want something and I have the money, I'll pay for it. If I want something and I don't have the money, I won't pay for it. I don't often want things outside my budget…

You are young, you want to use a credit card to protect yourself and build credit history. Using a debit card, in the event of fraudulent charges, the money is already gone from your bank account and now you are negotiating with your bank to get it back. With a credit card, you file the claim and its generally resolved before your statement closes and anything is due. Your card will also be immediately cancelled, so…

I am young, but not so young as that. I do have a credit card, I just don't use it for anything except the monthly cost of server hosting (to keep it in use). Despite its disuse, I have an "exceptional" credit rating, probably mostly due to the age of the account. So I appreciate the point about credit history, but my habit of preferentially using debit doesn't seem to have been to my detriment on that front.

As to fraud protection, I agree, but as noted in another reply, I wish I understood why the protections afforded to credit don't also apply to debit. There must be some systemic reason for it that I'm unaware of. As it stands, my best guess is simply that "it's a perk to entice people to use credit".

Re: Capital One to acquire Brex for $5.15B

#87

Post by Carrok »

itake wrote: post #62
hn_throwaway_99 wrote: post #32

Earlier quoted context omitted.

Its not great for those who got in later rounds, but I would assume all the investors had at least 1X preferences, so they'll at least get all their money back. I think this is a pretty decent outcome for Brex. I read they received a total of 1.3 billion in funding, so a 5.15 billion exit isn't bad, especially since the bottom dropped out of the market for so many fintechs that were founded and had big raises between…

I'm curious how the employees faired. Seems like they may bet getting nothing out of the deal if the investors get their money back.

We know how the employees did. Same as ever. They got whatever slop was left in the trough after the big pigs ate their share.

Bitter about VCs? Me? Never.

Re: Capital One to acquire Brex for $5.15B

#88

Post by moorow »

weird-eye-issue wrote: post #63
LgWoodenBadger wrote: post #35

Capitalone is going to need something to make up for switching all their debit cards from MasterCard to Discover

Who in the world uses debit cards

Nearly every transaction account in Australia now uses a debit card as the access card, usually Visa debit. Some people will have a credit card in addition to that.

Re: Capital One to acquire Brex for $5.15B

#89

Post by derektank »

Ancalagon wrote: post #53
nemath wrote: post #50

Should they have continued growing for a while before selling or was now the best ever time?

I feel like one of their primary investors wanted out. It was probably not the opportune time considering the cost of money right now.

Is there any reason to think the cost of money is going to improve at all in the foreseeable future?

Re: Capital One to acquire Brex for $5.15B

#90

Post by xp84 »

c2h5oh wrote: post #70
weird-eye-issue wrote: post #63

Earlier quoted context omitted.

Who in the world uses debit cards

Majority of EU population. Even in US debit is more popular than credit in 18-25 age bracket.

(Frame of reference: US only) That's a shame, given 18-25 is just the age where a credit card skimmer or online card fraud causing a big fraudulent withdrawal from your checking account, and weeks of waiting to get it back, could be devastating. This has happened to people in my family (likely from gas stations) but we only use credit cards except to pull cash from ATMs, so we only suffer a temporary dip in our available credit line while they investigate and do not have to pay the disputed charges in the meantime.

I know people with terrible credit may have problems getting a credit card, and others may have trouble not treating a credit line as spendable beyond their means, but everyone else should keep the 'debit card' at home or at least confined to their wallet.

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