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Launch HN: Payflow (YC S21) – Allow workers to access their wages instantly

news.ycombinator.com

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Re: Launch HN: Payflow (YC S21) – Allow workers to access their wages instantly

#91

Post by antihero »

wutbrodo wrote: post #71
RhysU wrote: post #66

Earlier quoted context omitted.

The payday loan puts backpressure on using it because it is obvious that the person is paying to use it. A zero interest loan does not communicate to the user that they are reducing their optionality until they are stuck.

This feels like quite a reach. Understanding that you've received X pesos now and will receive X less in two weeks is a lot simpler than implicitly calculating the NPV/default risk of high-interest loans, both from an intuitive and an explicit budgetary perspective. Even if we (incorrectly imo) assume this dynamic plays out the way you say it does, it's quite a bold claim to say that this putative psychological effec…

Nope. It's not a reach. My personal experience with payday loans which, due to having a regular income, was that I paid them back (with high interest but not the crazy amounts people talk about from missed payments) on time. It wasn't the interest that got me, it was the lack of money. That you then had to deal with for the next month, meaning you were more likely to get another loan.

Re: Launch HN: Payflow (YC S21) – Allow workers to access their wages instantly

#92

Post by giantg2 »

I see there are a lot of people knocking this. I agree it doesn't really fix root cause of the issues, but it does provide a better option than many of the existing ones. I can see this tool being used in a responsible way by a small percentage of people. I'm sure there are many others who would shoot themselves in the foot with it, as is true with many tools in life.

So overall, I'm trying to say that I do see some valid concerns here, but I also think there could be some value.

Re: Launch HN: Payflow (YC S21) – Allow workers to access their wages instantly

#93

Post by gotostatement »

zo1 wrote: post #83
gotostatement wrote: post #69

Earlier quoted context omitted.

>And the proposed solution doesn't fix that. Most of those people don't have a problem with unexpected expense once a year. They don't budget and are short on cash every month. So now imagine Bob needs money halfway through the month. He takes out 50% of his pay. He uses is for immediate needs and than has to live at 50% of his pay for the next 1.5 month. This is extremely paternalistic and shows how little you autom…

We all need to be treated like children that need help and guidance to some extent at various points in our lives. This is part of being within a broader community and I'm happy to accept it.

right, and you're a great example - you need to be treated like a child and guided to learn to respect and not stereotype adults who are given less money than you by our economic system. thats what you mean, right?

Re: Launch HN: Payflow (YC S21) – Allow workers to access their wages instantly

#94

Post by wutbrodo »

antihero wrote: post #91
wutbrodo wrote: post #71

Earlier quoted context omitted.

This feels like quite a reach. Understanding that you've received X pesos now and will receive X less in two weeks is a lot simpler than implicitly calculating the NPV/default risk of high-interest loans, both from an intuitive and an explicit budgetary perspective. Even if we (incorrectly imo) assume this dynamic plays out the way you say it does, it's quite a bold claim to say that this putative psychological effec…

Nope. It's not a reach. My personal experience with payday loans which, due to having a regular income, was that I paid them back (with high interest but not the crazy amounts people talk about from missed payments) on time. It wasn't the interest that got me, it was the lack of money. That you then had to deal with for the next month, meaning you were more likely to get another loan.

This thread is about the distinction between zero-interest loans and high-interest loans. The parent commenter claimed that people would be less likely to internalize the need to pay zero-interest loans because there's no interest. I said that the principal is a much more dominant concern. You are _agreeing with me_, but somehow couching your comment as disagreement?

> It wasn't the interest that got me, it was the lack of money.

This is precisely my point! The same thing applies for zero-interest loans.

Your comment says "it's not a reach [that the presence of interest is what makes people conscious of their payday loans]", and then says "the presence of interest is not what makes people conscious of their payday loans". Is this completely self-contradictory, or am I missing something?

Re: Launch HN: Payflow (YC S21) – Allow workers to access their wages instantly

#95

Post by zo1 »

arcturus17 wrote: post #88
zo1 wrote: post #83

Earlier quoted context omitted.

We all need to be treated like children that need help and guidance to some extent at various points in our lives. This is part of being within a broader community and I'm happy to accept it.

I hope you’re joking.

Helping and guiding people in your community when they need it is no joke.

Re: Launch HN: Payflow (YC S21) – Allow workers to access their wages instantly

#96

Post by jklein11 »

prepend wrote: post #82
jklein11 wrote: post #26

Earlier quoted context omitted.

Yes I think that is what is most confusing to me about why payday loans are so much more expensive. The creditors are taking on less risk than with credit cards and yet the return is greater.

The rates are typically high because they are loans of last resort and people still default. Typically people, in the US at least, have absolutely terrible credit and no one will extend to them. And while there are exceptions, typically people with horrible credit are likely to continue the cycle.

Yeah I get that from a demand perspective. I guess I don't quite get why there isn't more competition from a supply perspective. They are small loans that are secured. Why not offer the cheapest rate and dominate the market? It almost seems like the stigma around paycheck loans as being predatory is making them more expensive.
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