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It says “Apple Pay users can split purchases into four payments with zero interest and no fees.” Seems like a good deal – Apple is giving away money for free,

It says “Apple Pay users can split purchases into four payments with zero interest and no fees.” Seems like a good deal – Apple is giving away money for free, especially given current interest rates.

paxys 4y ago
The BNPL industry isn't some big charity. They offer such deals to hook people in, knowing that a huge chunk of them will miss payments and then they can hit them with interest and fees.
- danpalmer 4y ago
  Actually that's not how they make their money, and arguably is a distraction from their real money maker. https://www.bitsaboutmoney.com/archive/buy-now-pay-later/ https://www.bitsaboutmoney.com/archive/buy-now-pay-later/
  - lotsofpulp 4y ago
    Great link. But I assume Apple BNPL is not collecting 300bps extra processing fees from any and all merchants that accept Apple Pay.
- CapmCrackaWaka 4y ago
  Exactly. However, I think a bigger advantage of this business model is that it simply sells more stuff. It’s way easier to look at your monthly take home income and justify $100 per month for 12 months than a 1 time purchase of $1200. However, the problem is when you make those justifications, it becomes easier to make 10 of those purchases and achieve a debt-income ratio of 5.0 instead of budgeting and keeping a lower debt-income ratio over time.
  - chollida1 4y ago
    > It’s way easier to look at your monthly take home income and justify $100 per month for 12 months than a 1 time purchase of $1200. I think you should note that for apple, they are splitting payments into 4 over 6 weeks. So your example wouldn't fit the discussion we're having here.
  - carlosjobim 4y ago
    Thank you. That is exactly how people do in countries where splitting payments have been established and common for a long time, making everybody live on the edge in order to prop up consumer spending. If you actually save your money to only buy things when you can afford them, you can more easily purchase more expensive stuff with cash, since you've already saved up a chunk, and you are also much better prepared for unexpected costs.

paxys 4y ago

The BNPL industry isn't some big charity. They offer such deals to hook people in, knowing that a huge chunk of them will miss payments and then they can hit them with interest and fees.

danpalmer 4y ago
Actually that's not how they make their money, and arguably is a distraction from their real money maker. https://www.bitsaboutmoney.com/archive/buy-now-pay-later/ https://www.bitsaboutmoney.com/archive/buy-now-pay-later/
- lotsofpulp 4y ago
  Great link. But I assume Apple BNPL is not collecting 300bps extra processing fees from any and all merchants that accept Apple Pay.
CapmCrackaWaka 4y ago
Exactly. However, I think a bigger advantage of this business model is that it simply sells more stuff. It’s way easier to look at your monthly take home income and justify $100 per month for 12 months than a 1 time purchase of $1200. However, the problem is when you make those justifications, it becomes easier to make 10 of those purchases and achieve a debt-income ratio of 5.0 instead of budgeting and keeping a lower debt-income ratio over time.
- chollida1 4y ago
  > It’s way easier to look at your monthly take home income and justify $100 per month for 12 months than a 1 time purchase of $1200. I think you should note that for apple, they are splitting payments into 4 over 6 weeks. So your example wouldn't fit the discussion we're having here.
- carlosjobim 4y ago
  Thank you. That is exactly how people do in countries where splitting payments have been established and common for a long time, making everybody live on the edge in order to prop up consumer spending. If you actually save your money to only buy things when you can afford them, you can more easily purchase more expensive stuff with cash, since you've already saved up a chunk, and you are also much better prepared for unexpected costs.