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Burrito Now, Pay Later

enterprisevalue.substack.com

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Re: Burrito Now, Pay Later

#271

Post by c22 »

rtpg wrote: post #104
socalgal2 wrote: post #79

Earlier quoted context omitted.

No, rather I think I can scrape by for the few days it takes to get ahead of the curve for something as cheap as a burrito and then next month I can afford 5 burritos for every 4+interest I could only afford before. Paying for a PS5 or TV on credit I can see because it might take me months to save. But saving for a burrito is arguably something I shouldn't even have to save for in the first place.

To be clear I think the BNPL thing laid out here is Bad(TM), I just got there through my belief system about how society should be organized. I do not believe that life is measured in how many burritos I can or cannot get access to, so the idea that not using BNPL means I'll get more burritos next month falls a bit flat on me.

Huh, I am trying to maximize my burrito access, but there is a time-cost to burritos. If I am hungry today then a burrito now is worth more than 1.2 burritos a month from now.

Really, it seems more reasonable to use BNPL to purchase a burrito than a PS5.

Re: Burrito Now, Pay Later

#272

Post by geodel »

eli_gottlieb wrote: post #125
margalabargala wrote: post #53

Earlier quoted context omitted.

> > Is financing your lunch a sign of societal decay? Maybe, maybe not. > Financing your lunch means you can't pay for your lunch. And then somebody comes to search profit in that. Yep, it's societal decay. Counterargument: almost always when I buy something, lunch or otherwise, I put it on a credit card, which I pay off always before the due date but essentially never on the same day I had the lunch. Viewed through…

> But the American credit card system, which is the same sort of thing mildly rearranged, is far less exploitative. Than what? Have we actually checked what the level of fraud is by credit-card companies, or how they price various cards for various customers?

Please enlighten on "level of fraud". Whenever I hear this thing it is mostly that any fees/charge is evil and when there is no charge or fees then of course customer is the product.

Re: Burrito Now, Pay Later

#273

Post by programjames »

jerf wrote: post #26
programjames wrote: post #23

Why do finance bros like to call allocating all the resources to the maximal-dollar extracting process "efficient". It's not. All they're doing is turning the economy's entropy into dollar bills now, which stunts future growth.

In economics, "efficient" doesn't mean "produces maximal dollars". It means something much more like "an efficient economy has no arbitrage opportunities", because they've already been squeezed out. An efficient economy is one in which all the prices are correct, not one in which wealth-creation is maximized. Correct prices may help wealth-creation, but that would be a downstream effect.

I feel like the math term closest to that would be "consistent" not "efficient".

Re: Burrito Now, Pay Later

#274

Post by lm28469 »

kmnc wrote: post #124
shusaku wrote: post #61

It blows my mind that people use these food delivery services at all. The prices are wild. You hear people complain about how hard it is to make ends meet these days, yet they waste their money on these kind of luxuries. At least before you could wave it off as “well people buying Uber eats and complaining about the economy are separate groups”, but the existence of loans specifically for this blows up that argument.

This is pretty standard. Poor people end up paying more for worse. Poor people buy poor quality which needs to be replaced more often. They go into debt and pay interest paying far more than the original price. They spend money on convienent options like fast food and food delivery because they have no time for other options. Or they are actually depressed and taking efforts to save money and be healthier just are no…

> They spend money on convienent options like fast food and food delivery because they have no time for other options.

Utter and complete bullshit. If you're truly struggling you eat 50ct cans of cold baked beans and cheap ham, not $20 shitty pizza delivered 97 minutes after you placed the order. Even if your only cooking apparatus is a microwave you have no fucking excuse for spending hundreds per month on food delivery and fast food. Cheap ass ham, a can of beans and some pastas go a long way and take at most 15 minutes to prepare, you can even boil them in a fucking kettle if that's all you have.

Re: Burrito Now, Pay Later

#275

Post by trillic »

calmbonsai wrote: post #113

"This logic doesn’t change just because the thing being financed is a burrito." Yes, it absolutely _does_ change. One might as well go all the way and start offering Oxygen or Water bonds. The immorality masking as morality here is insulting--not related, mortgage-backed CDOs during the financial crisis and "Pay Day" loans. There are many, many fundamental individual needs and items (economic "utility") that, while f…

Water bonds have been a thing for centuries.

https://news.yale.edu/2015/09/22/living-artifact-dutch-golde...

Re: Burrito Now, Pay Later

#276

Post by margalabargala »

mmillin wrote: post #217
twoodfin wrote: post #202

Earlier quoted context omitted.

I finance all my burritos: It’s fantastically more convenient than cash, incrementally builds my credit rating, & I capture some of the efficiency surplus via rewards points. The article makes the point that BNPL packages up almost the same product into a bite-sized, low-risk (for both the borrower and the lender) package, making it available to everyone. Indeed, that does sound like a good thing.

> incrementally builds my credit rating Most BNPL plans are not reported to credit agencies and therefore don’t build credit. But “financing” by paying with a credit card and paying the balance in full would build your credit, still with no interest.

> But “financing” by paying with a credit card and paying the balance in full would build your credit, still with no interest.

The person you replied to is doing exactly this.

Re: Burrito Now, Pay Later

#277

Post by geodel »

nighthawk454 wrote: post #34

This 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…

Nah, as per this substack dude think of Burrito Now Pay Later as Quantitative easing so that one can make critical investments in strategic hunger management. So now it is everyone's duty to use BNPL so as to keep economy efficient.

Re: Burrito Now, Pay Later

#278

Post by margalabargala »

aaaaaaabbbbbb wrote: post #167
ivanbalepin wrote: post #165

Enjoyed the article, but the author was correctly questioned in the substack comments how is this any different than a credit card for the borrower and what justifies the "interest-free" myth here, since the BNPL payoff period largely overlaps with the CC grace period. To which the author responds: > Credit card float only lasts if you pay the full statement balance by the due date but that is identical to BNPL, it's…

Assuming one has access to a credit card and is financially literate, I agree that using BNPL is a hard sell (never having used it myself). But there is a large population--the unbanked--that lacks access to credit cards. For that population, the choice is not between credit card and BNPL, but BNPL and cash. I found the article's description of how BNPL structurally differs from credit cards interesting, as it is a r…

> But there is a large population--the unbanked--that lacks access to credit cards. For that population, the choice is not between credit card and BNPL, but BNPL and cash.

Which is an indication that the status quo will not last.

The median person who cannot get a bank account and a credit card, is in that state due to a history of either fraud or nonpayment.

Sooner or later, that preponderance of risk will catch up to BNPL and it will either become less accessible, like credit cards, or it will become more like services that already service that population segment, like check cashing locations and payday loans.

Them having better technology and granularity like you say won't save them. At best it can delay the inevitable.

Re: Burrito Now, Pay Later

#279

Post by margalabargala »

flakeoil wrote: post #266
UncleEntity wrote: post #262

Earlier quoted context omitted.

> What would you do with that cash for one month which is so profitable and risk free to compensate for the quite high risk of missing one of those BNPL invoices? Not arguing for this credit scheme but in my personal case I use my credit card for everything and pay it off in full on the due date. The money sits in my savings account making a minuscule, but not zero, amount of interest while the card gives "cash back…

> ...while the card gives "cash back on purchases". Sure, but cash back is a kind of marketing trick which makes the card user more willing to spend and use their card. It's this little extra which pushes you over to buy something because, hey, I get my cash back. There is no free lunch. Someone has to pay the cash back and we like to think it is the merchant, but in the end it is the consumer who pays for all these…

> Someone has to pay the cash back and we like to think it is the merchant, but in the end it is the consumer who pays for all these cash backs and card fees.

Well, specifically, it is the other consumers who frequent that merchant and pay in cash/debit. In the US anyway, at any business that does not charge CC fees, people who do not pay with a CC are subsidizing people who do.

Businesses generally are happy to pay the CC fees, because in the local minimum in which we exist, that is the price to pay to access a large segment of the population's purchasing power. Businesses are not required to accept CCs, and some do not, but those that do do so because the income brought in by the people with CCs who would not show up to a cash-only location outweighs the price of the CC fee.

Re: Burrito Now, Pay Later

#280

Post by InsideOutSanta »

zipy124 wrote: post #245
InsideOutSanta wrote: post #223

Earlier quoted context omitted.

> But it sounds very patronizing to say the “there’s a lot of poor people who don’t understand credit, so we need to prevent them from having access to any so they don’t get the chance to screw themselves”, so I understand why no one does. OTOH, the article literally says that "data [shows] that those with lower incomes, lower education, and worse credit (redundancies here) are more likely to use BNPL." Most consumer…

How is that on the other hand? I'm a little confused, as if anything it supports exactly what the person you are replying to was saying as they only mention that they are more likely to use BNPL, it doesn't take the extra step of saying perhaps they shouldn't be allowed to, or should be protected when doing so.

I'm not sure if I understand exactly what you're asking me, but I said "on the other hand" because the person I was responding to was concerned about sounding patronizing by pointing out that laws protect uneducated people, while the article outright states that this targets uneducated people. It wasn't intended to introduce a criticism of what the person I was responding to was saying.
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