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The first section of the article is riddled with errors or misleading statements that it's hard to take the rest of it seriously. >Starbucks holds nearly $2 bi
by gruez 1y ago
The first section of the article is riddled with errors or misleading statements that it's hard to take the rest of it seriously.
>Starbucks holds nearly $2 billion of customers’ money in its rewards program. That’s more than the total deposits managed by 85 percent of chartered banks, making the coffee chain one of the biggest financial institutions in the country.
Only in the sense that the US has thousands of banks, most of which are tiny. According to https://www.mx.com/blog/biggest-us-banks-by-deposits/ https://www.mx.com/blog/biggest-us-banks-by-deposits/, there are 4462 banks in the US. Starbuck's "nearly 2 billion" makes them so small it's not even in the top 250. You'd really have to stretch the truth to call that "one of the biggest financial institutions".
>More Americans than ever are in debt to their nearby grocery store due to predatory “buy now, pay later” loans offered during checkout.
>And if you can’t pay your rent on time, it could soon become common for your apartment building owner to lend you the money, putting you in debt to your landlord.
As others have mentioned, the debt is issued by the BNPL provider, not the grocery store or landlord. The article makes no effort to argue how it's any different than credit cards.
Skimming the rest of the sections, it's unclear what author actually wants. The article starts off lamenting how high of a margin payments networks have, but then lambasts challengers for setting up networks try to disrupt them.
- blacksmith_tb 1y agoWell, that's hyperbolic (and shares something with journalism that reports things in useless but colorful units like "massive as a dozen bull elephants"), but if we sidestep the question of how Starbucks compares to small banks, it does seem pretty impressive that they're holding $2B USD worth of stored value cardholders' money? NYT reports 25% of US consumers use BNPL to buy groceries[1] which seems worrying. 1: https://www.nytimes.com/2025/06/02/business/buy-now-pay-later-groceries.html https://www.nytimes.com/2025/06/02/business/buy-now-pay-late...
- grues-dinner 1y ago> Well, that's hyperbolic It's also a bit misleading because if you included every company that holds onto pre-paid customer money as the denominator, Starbucks may be be way lower down. My energy company at some point managed to get four-figures of my money in their bank account as "credit" before I could get it back. Games companies where you buy "tokens" for in game use also must be sitting on huge reserves. And any business that sells you "packages" up front, from hairdressers to IVF (probably individually quite small, though). In China, almost every restaurant and shop has a membership program where you get discounts for topping up certain amounts. When you have 500 in the account and your meal is 145.63, there's often a small interest-free loan to the business sitting there.