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Because most merchants would then need to borrow money to pay their suppliers and expenses while awaiting payment, which would end up costing them a lot more th
by abalone 13y ago
Because most merchants would then need to borrow money to pay their suppliers and expenses while awaiting payment, which would end up costing them a lot more than an extra 1%.
- ethanazir 13y ago"extra 1%" on month > 12% APR.
- PeterisP 13y agoWhy 'on month'? You'd get a 1% discount at most; if you 'buy' that discount by freezing all funds for the whole chargeback period (90-120 days) then it's 3-4% APR. [edit] the thinking is, if your revenue is $100/year, then in (A) scenario with higher rate you pay $1/year more in fees; in (B) scenario with delayed funds you need a permanent loan of ~$25 which will cost you more than that unless you can get an APR of lower than 4%.
- deleted 13y ago[deleted]
- ethanazir 13y agostd credit now:customer pays % after 1st month & merchant pays 36% APR during customer grace of 1 month.
- abalone 13y agoWishful thinking > actual APR of short-term, high-risk loans and difficulty of small businesses in securing them in the first place.