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Where is the business model if not to charge users a late fee or high interest when they can't pay it back? Yes, it seems like a credit card in that it's predat

Where is the business model if not to charge users a late fee or high interest when they can't pay it back? Yes, it seems like a credit card in that it's predatory and should be illegal. We're literally discussing taking out personal loans for food.

BugsJustFindMe 5y ago
> Yes, it seems like a credit card in that it's predatory and should be illegal. Saying that credit cards should be illegal is laughable. Whether they're predatory could be debated, but there is zero downside to using credit cards if you pay off the monthly balance. > Where is the business model if not to charge users Well, the article says "the companies more often make their money from retailer commissions, not missed payments", so let's say that the business model is there.
nemothekid 5y ago
>Where is the business model if not to charge users a late fee or high interest when they can't pay it back? Interchange fees. Most high limit card holders don't hold a balance (ex. the Amex Platinum/Gold/Green cards are charge cards that don't carry a balance). They make money by charging the retailing the .30c+2.9% fee on every transaction. This is why it's also makes sense to always use a credit card provided you pay it off - retails mark up everything to give credit card processors their "fee", but credit card companies give you kickbacks in the form of points. If you pay cash, you are subsidizing everyone else's credit card points.
- ZeroGravitas 5y ago
  Also, this is the original model for the online business models that HN users often complain about. Short term interest free loans? And all I have to do is give you a constant stream of information about where I am and what I'm buying that you can use to build a profile on me? And it turns out its not even free, its just baked into the price even if you refuse to be tracked?
  - BugsJustFindMe 5y ago
    Information profiling and payment skimming are entirely separate issues. You could make the profiling illegal and it would still be good for buyers and profitable for businesses to give interest free loans while skimming processing fees.
- blueblisters 5y ago
  How do BNPL lenders convince merchants to pay an interchange fee? They don't have the customer base and negotiating power of credit card networks.
  - nemothekid 5y ago
    They only have to be cheaper than Visa and have a dead simple integration process. After the fixed cost of integration, the retail pays nothing to have the option - and if a prospective customer does use the service, then they might make a little bit more than if that customer had used a Chase Sapphire Reserve

BugsJustFindMe 5y ago

> Yes, it seems like a credit card in that it's predatory and should be illegal. Saying that credit cards should be illegal is laughable. Whether they're predatory could be debated, but there is zero downside to using credit cards if you pay off the monthly balance. > Where is the business model if not to charge users Well, the article says "the companies more often make their money from retailer commissions, not missed payments", so let's say that the business model is there.

nemothekid 5y ago

>Where is the business model if not to charge users a late fee or high interest when they can't pay it back? Interchange fees. Most high limit card holders don't hold a balance (ex. the Amex Platinum/Gold/Green cards are charge cards that don't carry a balance). They make money by charging the retailing the .30c+2.9% fee on every transaction. This is why it's also makes sense to always use a credit card provided you pay it off - retails mark up everything to give credit card processors their "fee", but credit card companies give you kickbacks in the form of points. If you pay cash, you are subsidizing everyone else's credit card points.

ZeroGravitas 5y ago
Also, this is the original model for the online business models that HN users often complain about. Short term interest free loans? And all I have to do is give you a constant stream of information about where I am and what I'm buying that you can use to build a profile on me? And it turns out its not even free, its just baked into the price even if you refuse to be tracked?
- BugsJustFindMe 5y ago
  Information profiling and payment skimming are entirely separate issues. You could make the profiling illegal and it would still be good for buyers and profitable for businesses to give interest free loans while skimming processing fees.
blueblisters 5y ago
How do BNPL lenders convince merchants to pay an interchange fee? They don't have the customer base and negotiating power of credit card networks.
- nemothekid 5y ago
  They only have to be cheaper than Visa and have a dead simple integration process. After the fixed cost of integration, the retail pays nothing to have the option - and if a prospective customer does use the service, then they might make a little bit more than if that customer had used a Chase Sapphire Reserve