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Comment by numpad0 | Hacker News Reader

OT: just googled that name, info panel on the right in my language settings categorizes it as "金融の連鎖", or "cascading of finances". am not sure how to take that.

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Klarna is basically loan sharks but if you do it with an app is legal. Also Opera the browser moved to doing that.

In fairness to Klarna, the interest rates they charge are typically low or even zero. The problem is more that they're encouraging poor people to waste money on things they probably shouldn't buy in the first place, like expensive concert tickets or consumer electronics.

I used to work at a competitor to klarna so take this with a grain of salt, but the zero interest rates aren't really zero. They finance either by klarna eating into their runway, or by the business paying the interest up front. Which usually leads to higher prices for everyone, regardless of you using klarna or not

That's only the case if demand is static. The parent comment mentions that "poor people buy more stuff" which is increased demand

Pretty good description tbh

Their business model is an online payment provider (like e.g. PayPal/apple pay) that splits the payment into 3, 6 or 12 monthly payments, usually at 0% interest

The idea being that for the business the loss in revenue from an interest free loan is worth it if it causes an increase in sales

But isn't it supposed to be more like "financing franchise"?

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