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Burrito Now, Pay Later

enterprisevalue.substack.com

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Re: Burrito Now, Pay Later

#131

Post by calmbonsai »

sweeter wrote: post #110
spicyusername wrote: post #100

One reason is that someone’s or a company’s income doesn’t always align perfectly with when they want to buy things. When we're talking about financing the construction of a new downtown office tower, a new apartment complex, or the unexpected maintenance of your business's whole auto fleet, I can absolutely see the argument that credit is a mechanism of greasing the wheels of the economy and allowing things to happe…

I think that is about the most gentle way you can put it. This is an echo of 2008 and the notion that this is normal is so absurd to me. It comes off as super out of touch. Financing groceries is dystopian.

I agree. Just because you can price, trade, and provide liquidity for "a thing" doesn't mean "that thing" can, or should, be financialized.

Re: Burrito Now, Pay Later

#132

Post by mattnewton »

JackFr wrote: post #107
mattnewton wrote: post #5

> If you think the price of oil will be $120 after a year, you can use futures or options on futures to make this bet. If you think the S&P 500 will be over 6,500 within 2 years and the yield on 10Y Treasury bonds will be 4.25%, investment bankers will help you express this view for a fee. I’m sorry but I think the either the author or I have entirely lost the plot. Finance is a game we play to make humans better off…

In commodities and certain derivative markets, hedgers need to be matched with speculators . Hedgers are offsetting risk to speculators. Thus a farmer can insulate themselves against a drop in the price of corn and an airline can insulate themselves against a jet fuel hike. To do that someone has to take that risk. It might by to satisfy their risk appetite which will be tied to returns.

I think I understand that. I don’t see how it self evidently is good for hypothetical burrito sellers to financialize their industry follows from that. There are a lot of differences between agricultural crops and take out, and financialization has costs.

Being able to bet on something isn’t inherently good, but the article seems to treat that as axiomatically true without offering an explanation about the problem financialization is solving in the BNPL burrito delivery space, like you have for airlines and farmers.

Re: Burrito Now, Pay Later

#133

Post by wat10000 »

kweingar wrote: post #54

I keep hearing people express dismay that people are financing their lunch, sneakers, or concert tickets. But this has been the norm for a while, no? I can't remember the last time I didn't utilize credit at a restaurant or retail store. If you use credit cards, it doesn't make sense to reflexively admonish people for using BNPL for everyday purchases. To be sure, BNPL is in many ways a predatory innovation. But it i…

A lot of people are very skeptical of credit cards, and it’s pretty common to see people recommending against them or outright calling them evil with pretty much the same arguments you see here.

Among those who like credit cards (of which I am one), the “credit” part is basically irrelevant. Paying for my stuff a few weeks later is nice, but it’s not why I use credit cards. If there was a card that offered an extra 0.5% cash back but purchases had to be paid immediately, I’d jump on it.

Re: Burrito Now, Pay Later

#134

Post by guywithahat »

I feel like the comments are misunderstanding what's happening. Historically luxury food has been nice ingredients but now that's everywhere, and what consumers really want is delivered food. They want the thing they want, only made 6 miles away, hand delivered to them and still warm. This is a luxury good, and like many luxury goods may now be financed.

Cheap food is not going away; my lunch every day costs ~55 cents to make. In this context of luxury goods, the article makes more sense and isn't some dystopian nightmare like people are implying, it's just another luxury good you may buy.

Re: Burrito Now, Pay Later

#135

Post by calmbonsai »

ToucanLoucan wrote: post #56
zug_zug wrote: post #12

I think this would be more informative if it dropped all moral pretense and just talked about the economics objectively. If we’re gonna call a spade a spade, bnpl is one of a dozen services that extracts money from those whose judgment we doubt (like gambling, lottery, junk food?, drugs, overpriced status-symbol vehicles, or even “digital goods”).

Why do we have to discard the morals of a business to judge it "objectively?"

You don't and you shouldn't. GaaP even has regs for "intangible assets" which, among other things includes "branding wrt prevailing market mores".

Re: Burrito Now, Pay Later

#136

Post by titanomachy »

guywithahat wrote: post #134

I feel like the comments are misunderstanding what's happening. Historically luxury food has been nice ingredients but now that's everywhere, and what consumers really want is delivered food. They want the thing they want, only made 6 miles away, hand delivered to them and still warm. This is a luxury good, and like many luxury goods may now be financed. Cheap food is not going away; my lunch every day costs ~55 cent…

I don’t totally disagree, but it’s a little different because continuous access to food is necessary in more so than any other good. If you obscure the fact that someone can’t actually afford to eat hand-delivered burritos for every meal, they may do so to their detriment. Easy access to credit obscures the unaffordability of luxury goods, especially for those with low financial literacy. If I _can_ press the burrito button any time I want, it’s tempting to do it every time instead of eating cheap buttered noodles. If I get an error saying “you have no money left”, I will make the damn noodles.

Re: Burrito Now, Pay Later

#138

Post by 63stack »

howard941 wrote: post #15
pxndx wrote: post #7

Absolutely unhinged content from someone who needs to touch grass. Payday loans are scams that prey on the poorest, most uneducated people. This industry is actively harmful to society. But hey, I'm sure writing this helps you sleep at night.

The payday loan people are very nice and friendly. Seriously. Maybe the only friendly finance people those struggling talk to. Even so yes they are actively harmful.

Of course they are, it's just a part of the job.

Re: Burrito Now, Pay Later

#139

Post by usefulcat »

It sounds like a big part of the target market for this is people who are living paycheck to paycheck, but those are exactly the people who should not use it.

The less disposable income you have, the more careful you need to be about not exceeding it, because if you do it can be very difficult (not merely inconvenient) to dig yourself out of that hole.

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