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Every business once it gets out of its rapid growth phase seems to want to become a bank. Car companies are all about loans now, "X" is an attempt to turn socia

Every business once it gets out of its rapid growth phase seems to want to become a bank. Car companies are all about loans now, "X" is an attempt to turn social media into banking (and not the first), Google and Apple are both into payments and other financial services, and the list goes on and on. Either the market has an endless appetite for banking or capitalism does not in the end deliver what markets want.

creato 3y ago
> Either the market has an endless appetite for banking I don’t like it but I think it’s clear this is the case. The demand for “buy now, pay later” seems to be huge, even if it costs more in the end, even for seemingly trivial amounts of money for regular purchases. But I really have no idea how much things like affirm on Amazon actually get used, maybe no one else is using it either.
sharedbeans 3y ago
You say that as if you cannot buy a car or an airline ticket. In fact you can, because airlines fly planes and sell tickets on them, and car manufacturers make cars and sell them. It may be cute to say “X is a bank”, but an airline is not a bank. Besides the obvious facts that you cannot withdraw money from an account or pay your bills, if they didn’t fly planes the points would be ~worthless. The fact that they don’t profit from those activities is a market economy working as intended*. Cars and flights are easily substitutable goods, you’d expect to see the profit competed down to ~nothing. *Arguably there is getting to be too much consolidation in the airline industry, and also legal limits on airport gates act as a huge barrier of entry for new competition. (edited for clarity)
hakfoo 3y ago
I suspect in the end, the financial component of any business has the highest margins, so business seeks it like a plant growing towards the sun. To do the "actually send passengers from LAX to ORD" part of running an airline you have to pay for pilots, gate agents, planes, the world's smallest cups of flat ginger ale... But shuffling around frequent flyer miles as a psuedo-currency? No actual tangible expenses there, just some obligations that end up on some future quarter's balance sheet.

creato 3y ago

> Either the market has an endless appetite for banking I don’t like it but I think it’s clear this is the case. The demand for “buy now, pay later” seems to be huge, even if it costs more in the end, even for seemingly trivial amounts of money for regular purchases. But I really have no idea how much things like affirm on Amazon actually get used, maybe no one else is using it either.

sharedbeans 3y ago

You say that as if you cannot buy a car or an airline ticket. In fact you can, because airlines fly planes and sell tickets on them, and car manufacturers make cars and sell them. It may be cute to say “X is a bank”, but an airline is not a bank. Besides the obvious facts that you cannot withdraw money from an account or pay your bills, if they didn’t fly planes the points would be ~worthless. The fact that they don’t profit from those activities is a market economy working as intended*. Cars and flights are easily substitutable goods, you’d expect to see the profit competed down to ~nothing. *Arguably there is getting to be too much consolidation in the airline industry, and also legal limits on airport gates act as a huge barrier of entry for new competition. (edited for clarity)

hakfoo 3y ago

I suspect in the end, the financial component of any business has the highest margins, so business seeks it like a plant growing towards the sun. To do the "actually send passengers from LAX to ORD" part of running an airline you have to pay for pilots, gate agents, planes, the world's smallest cups of flat ginger ale... But shuffling around frequent flyer miles as a psuedo-currency? No actual tangible expenses there, just some obligations that end up on some future quarter's balance sheet.