In the text there are no benefits for the borrower/consumer outlined. BNPL is basically just a scam to lure in people to use this easy option to pay and then charge them late fees and interest once they forget one of their bills. It's not even convenient (except at checkout) because you will get a bill to pay down the line and that's not convenient to pay.
Burrito Now, Pay Later
231–240 of 364 posts
Re: Burrito Now, Pay Later
#232Earlier quoted context omitted.
The lack of food can be explained either by a shortage of demand or a shortage of supply. Many people assume that the demand is there and the supply is the problem - people are desperate for healthy food but no one wants to sell it to them for some reason (the reason is always left unsaid). Instead, they have no choice but to shop at 7/11. So presumably, as soon as a store selling fresh, nutritious ingredients opens…
Time is extremely scarce for poor people. Cooking healthy and cheap meals means research, planning and batch meal prep. This also requires being a forward-looking state of mind. Personally, I think the government should be investigating ways to raise income levels for the poorest. I don’t know what form this should take - UBI? negative income tax? - but fix that and the rest would follow for many people.
And what would increasing the income do for changing the state of mind, or for better time management ?
Re: Burrito Now, Pay Later
#233Earlier quoted context omitted.
Food is a basic human need, paying someone to make a burrito for you and then hand deliver it to your house is not. There is no shortage of food in america. In brazil, many people don’t eat meat because it’s too expensive, and get the vast majority of their calories from beans and rice. you can also do this in america, but almost no one does outside of college students because food is cheap enough relative to wages t…
> Food is a basic human need, paying someone to make a burrito for you and then hand deliver it to your house is not. There is no shortage of food in america. Do some googling about what is a "food desert", plenty of lower income people in the USA live somewhere that the grocery store options and fresh, nutritious ingredient shopping options are VERY poor. Or a costly distance away to drive on a regular basis. I am n…
There was a short discussion here[1] recently on this topic, where I added[2] some extra context. Turns out it's probably not so cut and dry.
Re: Burrito Now, Pay Later
#234Earlier quoted context omitted.
But if you read the article, it doesn’t? bnpl makes its money off charging merchants a few points higher service fees than cards, which for a lot of merchants is worth it to close the deal. (Unstated in the article is that richer people with better credit have regular access to no-interest/negative fee consumer loans on the order of 6-18 mos., so they have no reason to use BNPL)
But why would the merchants willing to pay the fees in providing a BNPL scheme for their customers? One would assume that it would increase sales, which makes it worthwhile. It's not caused by increase outreach though: from what I've seen, BNPL is usually an additional payment option when you're already on the product page. Then the question becomes: who are the extra customers that a BNPL scheme would bring, that wo…
Oh it absolutely does come with increased outreach. The BNPL providers have apps marketing deals to users
Re: Burrito Now, Pay Later
#235This is blatantly just increasing debt load. What does a business do if they need forever growth, but can’t increase their prices further without losing net revenue? Raise prices anyway and push people to finance it. This is broadly not good for people. Financing things like your food or your rent (seriously - that’s a thing here) doesn’t help if they’re recurring. It’s not like people are gonna need to just finance…
Thank you for clearly and concisely articulating why this is dangerous from the securities aspect. I think the immorality of it for consumers is obvious on the surface, but the backend financial stupidity of it is slightly less obvious. At least to me, I felt that it was risky but couldn’t clearly articulate why until reading this. The only difference may be how many people buy into these. I don’t imagine BNPL securi…
I certainly agree, I think the financial mechanisms are not very obvious. Presumably somewhat by design. And yet it also seems to be one of the main tricks in modern financial engineering - it just keeps turning up. See also: corporate buybacks, private equity, private credit, mortgage backed securities, etc.
All are versions of this ‘shuffling of risk’ from debtors to “investors”. The middlemen take their cut along the way. Then if and when the bubble bursts debtors default and investors take a bath. Or the slow case, the debt inflates away and investors pay for it in lack of returns, ultimately losing money in real terms despite balances going up.
While BNPL by itself may not be large enough to do the economy in, some of those other examples mentioned are. And I imagine there’s probably some joint risk from running so many instances of this scheme at once (i.e. one goes out they all go out).
Re: Burrito Now, Pay Later
#236Earlier quoted context omitted.
Time is extremely scarce for poor people. Cooking healthy and cheap meals means research, planning and batch meal prep. This also requires being a forward-looking state of mind. Personally, I think the government should be investigating ways to raise income levels for the poorest. I don’t know what form this should take - UBI? negative income tax? - but fix that and the rest would follow for many people.
And what would increasing the income do for changing the state of mind, or for better time management ?
Are you suggesting people are poor because they don't have good time management?
Re: Burrito Now, Pay Later
#237If people can’t afford to eat then profitable business are not sharing enough of their profits with the people working for them, and unprofitable essential work is not getting funded enough. We should be ensuring people have an income that is enough to live off through minimum wages and job guarantees and when it comes to it a UBI, instead of letting people sell themselves into servitude with survival debt.
Re: Burrito Now, Pay Later
#238Earlier quoted context omitted.
But if you read the article, it doesn’t? bnpl makes its money off charging merchants a few points higher service fees than cards, which for a lot of merchants is worth it to close the deal. (Unstated in the article is that richer people with better credit have regular access to no-interest/negative fee consumer loans on the order of 6-18 mos., so they have no reason to use BNPL)
But why would the merchants willing to pay the fees in providing a BNPL scheme for their customers? One would assume that it would increase sales, which makes it worthwhile. It's not caused by increase outreach though: from what I've seen, BNPL is usually an additional payment option when you're already on the product page. Then the question becomes: who are the extra customers that a BNPL scheme would bring, that wo…
The extra customers are people who can’t afford to buy whatever nonessential product is being hawked, unless it is on a payment plan.
BNPL just encourages overspending by the most precarious consumers, ensuring that they will never get ahead.
Re: Burrito Now, Pay Later
#239One 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…
Food is a basic human need, paying someone to make a burrito for you and then hand deliver it to your house is not. There is no shortage of food in america. In brazil, many people don’t eat meat because it’s too expensive, and get the vast majority of their calories from beans and rice. you can also do this in america, but almost no one does outside of college students because food is cheap enough relative to wages t…
> In brazil, many people don’t eat meat because it’s too expensive
During the 2008 recession, I remember a woman who called in to one of the financial advice radio shows (Dave Ramsey?). She was talking about how her husband has been laid off and they were eating beans, tortillas and rice, and how i simply thought, "so you're eating....mexican food?"
That said, it's crazy how a burrito is $12 now and a two taco, beans/rice dinner at the generic Mexican restaurants in town is $16. This is peasant food that should be dirt cheap. Even the gray-market facebook food sellers want $12.
Re: Burrito Now, Pay Later
#240Earlier quoted context omitted.
Food is a basic human need, paying someone to make a burrito for you and then hand deliver it to your house is not. There is no shortage of food in america. In brazil, many people don’t eat meat because it’s too expensive, and get the vast majority of their calories from beans and rice. you can also do this in america, but almost no one does outside of college students because food is cheap enough relative to wages t…
> Food is a basic human need, paying someone to make a burrito for you and then hand deliver it to your house is not. There is no shortage of food in america. Do some googling about what is a "food desert", plenty of lower income people in the USA live somewhere that the grocery store options and fresh, nutritious ingredient shopping options are VERY poor. Or a costly distance away to drive on a regular basis. I am n…
If you live in a "food desert" you can get a frozen burrito at Walgreens or a corner store for $1