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Comment by treelovinhippie | Hacker News Reader

Square is buying a loan shark service.

"The Australian Securities and Investments Commission found one in five buy now, pay later users is missing payments, half of users aged between 18 to 29 cut back on essential items to make repayments, and more than 1.1 million transactions in 2019 incurred multiple missed payment fees.

It also warned 15 per cent of users, and half under 29, had taken out an additional loan to pay for the services, while 55 per cent of consumers paying late had used at least two different buy now, pay later providers in the past six months."

https://www.afr.com/companies/financial-services/one-in-five...

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From "Margin Call (2011)" - context is a subprime investment banker explaining how he justifies doing what he does:

> People wanna live like this in their cars and big fuckin' houses they can't even pay for, then you're necessary. The only reason that they all get to continue living like kings is cause we got our fingers on the scales in their favor. I take my hand off and then the whole world gets really fuckin' fair really fuckin' quickly and nobody actually wants that. They say they do but they don't. They want what we have to give them but they also wanna, you know, play innocent and pretend they have no idea where it came from.

This is fulfilling a demand, it's one I don't agree with either, and think we'd be better off without, but people are asking for it. At least it's a legit company doing it and not a mobster or money launderer.

Don't beat yourself too much about this stuff, all right? Some people like driving the long way home.

Are Afterpay really to blame for this? Credit cards have been around since the 80s and are far more predatory. Pawnbrokers have been around for centuries.

Even without debt, so many people have an impulse to spend as much as they can and put themselves in a financially precarious situation where one emergency bowls them over.

I'm not saying Afterpay are ethical, but I'm sure you'd find a similar amount of people foregoing necessities to make dumb impulse purchases regardless of payment method.

The problem is their target market is people who don't have (or can't get) a credit card.

If you already have a credit card, whats the point of Afterpay?

> The problem is their target market is people who don't have (or can't get) a credit card.

Are you sure? Pretty much anyone with a job can get a ridiculously high credit limit.

>If you already have a credit card, whats the point of Afterpay?

Capped late fees, for one. Afterpay lets you impulse purchase things you can't afford but doesn't trap you on a neverending treadmill of servicing debt.

Yes, these new POS financing companies are not good. I briefly worked for one before fully understanding what kind of businesses they are and how they make their money. They may put a pretty face on things but their financials look nothing like a "regular" startup, it's rebranded high APR loans.

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