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Comment by 41209 | Hacker News Reader

>One lender, Quadpay, posted a TikTok encouraging people to take out installment loans to pay for groceries, framing the advice as “the world’s biggest secret.”

This made me mildly sick. At the same time, so many people are struggling it's no wonder a low interest loan to buy a sandwich is a popular business model. In a perfect world this type of thing would just be banned, but then arguably some people wouldn't eat

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You're misrepresenting the offer. Quadpay is not "low-interest". It's ZERO interest. There's a huge difference between a loan with interest and a loan without interest. Zero interest loans are good for everyone unless they spend more than they can pay back within the timeframe. It's exactly the same as using a credit card and paying the balance on time.

Where is the business model if not to charge users a late fee or high interest when they can't pay it back? Yes, it seems like a credit card in that it's predatory and should be illegal. We're literally discussing taking out personal loans for food.

> Yes, it seems like a credit card in that it's predatory and should be illegal.

Saying that credit cards should be illegal is laughable. Whether they're predatory could be debated, but there is zero downside to using credit cards if you pay off the monthly balance.

> Where is the business model if not to charge users

Well, the article says "the companies more often make their money from retailer commissions, not missed payments", so let's say that the business model is there.

>Where is the business model if not to charge users a late fee or high interest when they can't pay it back?

Interchange fees. Most high limit card holders don't hold a balance (ex. the Amex Platinum/Gold/Green cards are charge cards that don't carry a balance). They make money by charging the retailing the .30c+2.9% fee on every transaction. This is why it's also makes sense to always use a credit card provided you pay it off - retails mark up everything to give credit card processors their "fee", but credit card companies give you kickbacks in the form of points. If you pay cash, you are subsidizing everyone else's credit card points.

Also, this is the original model for the online business models that HN users often complain about.

Short term interest free loans? And all I have to do is give you a constant stream of information about where I am and what I'm buying that you can use to build a profile on me?

And it turns out its not even free, its just baked into the price even if you refuse to be tracked?

Information profiling and payment skimming are entirely separate issues.

You could make the profiling illegal and it would still be good for buyers and profitable for businesses to give interest free loans while skimming processing fees.

How do BNPL lenders convince merchants to pay an interchange fee? They don't have the customer base and negotiating power of credit card networks.

They only have to be cheaper than Visa and have a dead simple integration process. After the fixed cost of integration, the retail pays nothing to have the option - and if a prospective customer does use the service, then they might make a little bit more than if that customer had used a Chase Sapphire Reserve

>>framing the advice as “the world’s biggest secret.”

>This made me mildly sick.

It made me mildly sick too, so much so that I decided to check out the video. After watching it I can't say that their claim that it was being framed as "the world’s biggest secret" is accurate. The video just shows someone shopping, and pointing out you can use quadpay like a credit card.

I think OP is referring to the beginning of the video where the person shopping says "I'm going to let you in on the world's biggest secret". The audio unmutes weirdly so you may not have heard it. The video for reference - https://www.tiktok.com/@zip_usa/video/6943316833743211782

>The audio unmutes weirdly so you may not have heard it.

Yeah that was it. Thanks for the correction.

It's better to skip a meal now than take out a loan that makes you skip two meals later. If you can't afford to buy a sandwich, just buy the peanut butter for less and have plenty to eat. Also, survival food is cheap as dirt. No one starves due to food prices.

Not sure why this is getting downvoted. I suspect it's due to the last sentence, but getting 2000 calories of food for less than $2 is very doable:

https://www.upstart.com/blog/lowest-cost-per-calorie-foods

2. White rice – $0.41 per 2,000 calories

7. Peanut butter – $1.25 per 2,000 calories

8. Whole milk – $1.37 per 2,000 calories

9. Pinto beans – $1.39 per 2,000 calories

13. Eggs – $1.61 per 2,000 calories

Add in a few extra dollars for fruits/vegetables and you got a balanced meal for less than 1 hour of the federal minimum wage.

This doesn’t help those dependent on illicit substances, which tend to become a necessary coping mechanism once financial disenfranchisement becomes constant survival stress and days sort of start blurring together because of the PTSD symptoms.

Have you ever HAD to survive on that kind of diet?

You know eating until you are obese is a much cheaper coping mechanism than street drugs.

I would argue being obese is far worse for your health than most, if not all, "street drugs"

Sounds like the problem is "illicit substances" and/or "PTSD symptoms", not high food prices.

Are you sure the problem isn’t the financial disenfranchisement?

That is exactly the narrative Nixon’s administration used to shift the public’s perception of black and anti-war communities when outlawing drugs to legitimize targeted harassment. Blame the patsies and display them as an opposite of a red herring. Never acknowledge the problem.

Think about on which side of history you take your stand.

I'm baffled as to how we went from "if you have substance abuse issues you'll have trouble feeding yourself even when food is cheap" to "Think about on which side of history you take your stand".

Substance abuse requires a lot of money because drugs are illegal. Therefore substance abusers tend to become financially disenfranchised, which limits their agency and social mobility.

Drugs are illegal because white supremacist hate- and war-mongers made them illegal to further their hate- and war-mongering.

Do you really not see the connection?

Disenfranchise: deprive of a right or privilege

What right or privilege are you saying people have with regards to money?

The ability to provide for their basic needs.

The right to buy goods/services in exchange for that money, of course! /s

You need to price in the infrastructure for acquisition, storage, and prep (once you do, you see why GP mentioned peanut butter). Also, one has to price in the nontrivial hoops we make poor people go through to get their minimum wage or food stamps.

Yeah, it's more than possible to survive -- and people do -- but why are these "survival cost" calculations always so dishonest?

>but why are these "survival cost" calculations always so dishonest?

Because GP mentioned a specific claim, which is food prices? If you're malnourished, and rent costs $1500/month but you can feed yourself on $150, how much are food prices to blame for that?

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