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Comment by margalabargala | Hacker News Reader

> > Is financing your lunch a sign of societal decay? Maybe, maybe not.

> Financing your lunch means you can't pay for your lunch. And then somebody comes to search profit in that. Yep, it's societal decay.

Counterargument: almost always when I buy something, lunch or otherwise, I put it on a credit card, which I pay off always before the due date but essentially never on the same day I had the lunch. Viewed through the lens of a society that only paid up front in cash, what I do would be viewed as risky and irresponsible; but it is not.

BNPL as it currently exists, in the form described in this article, is exploitative. But the American credit card system, which is the same sort of thing mildly rearranged, is far less exploitative.

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The credit card company still takes a 2-3% cut, which absolutely gets passed on to consumers. You get part of it back in the form of credit card rewards and services (eg. fraud protection, charge backs) but it's still a tax on everything.

BNPL is worse, they take 5% and all you get is a small loan for a few weeks. Their whole business model relies on it being "free" for middle-class people who will pay back their loans, because the fee is hidden in the purchase price. This is an area where government regulation is actually required, all transaction fees should be disclosed and charged as a surcharge on the base purchase price, whether it's a credit card or BNPL, to provide a fair and competitive market for consumers and merchants.

>This is an area where government regulation is actually required, all transaction fees should be disclosed and charged as a surcharge on the base purchase price, whether it's a credit card or BNPL

Btw. in Europe the card thing was solved differently. First, most people use debit cards, not credit cards. Second, card fees are capped at 0.2% which makes it actually a cost saving measure (cash processing is not free).

People use debit card in the USA as well

The difference is that in the States a cash discount is only rarely offered. It’s common in some areas (gasoline often costs less when you pay with debit, contractors and other similar small businesses will usually pass that 3% on to the consumer as well) but not others. Much more common is that the business charges the same for both (basically every direct to consumer retailer charges same for both debit and credit).

The indirect result is that people with debit cards and cash payers are actually indirectly subsidizing credit card holders in the States. You’re actually operating at a disadvantage if you don’t funnel most of your spend through a credit card in the States

Let's start by not calling it a "cash discount", since it's a misnomer. The real term is "card processing fee" (and lack thereof).

And yes, it would sure be nice to mandate explicit card fees for all uses. That would make debit cards that much more attractive.

> Viewed through the lens of a society that only paid up front in cash, what I do would be viewed as risky and irresponsible

Are you sure about that?

I would be surprised if a society that only paid up front in cash had ever existed. For example, "if you do something for me now, I'll do something for you later" is a much more basic form of interaction than "if you do something for me now, I'll give you this money" is.

Financing your meals isn't an exotic concept; it has normally been known as "running a tab". But running a tab involves periodic settlement of whatever the tab has run to. It isn't broken down into individual transactions each on their own detailed payment plan. This is something that doesn't make sense for small purchases.

> But the American credit card system, which is the same sort of thing mildly rearranged, is far less exploitative.

Than what? Have we actually checked what the level of fraud is by credit-card companies, or how they price various cards for various customers?

Please enlighten on "level of fraud". Whenever I hear this thing it is mostly that any fees/charge is evil and when there is no charge or fees then of course customer is the product.

Fees and charges are not fraud. Fraud is defined in the law.

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