Credit Cards

[dealmaker]

Affirm’s app lets you borrow for almost any online purchase
Lending startup Affirm, founded by PayPal and Yelp co-founder Max Levchin, is out to destroy the credit card, or at the very least make a noticeable dent in its utter ubiquity. The company, which began in 2012 by offering simple and transparent loans for web purchases, launched a mobile app to the public that acts as a virtual credit card. (The Verge)

 

[AA_Anonymous]

Now they can see everything you purchase, instead of only seeing where you spend your money. I can't see this taking off.

 

[beerntrading]

This smacks of predatory lending...if customers were worthy credit risks they'd have credit that isn't linked to individual purchases. I guess my question here is how is this different from overdraft "protection"? It's extending credit to people who cannot afford it, and don't know they can't afford it. It's preying on the ignorant.

As someone who underwrites insurance for a living, I always ask if it's in my customer's best interest to write insurance for them, and I routinely tell people I won't quote their insurance because they would be paying me for nothing. Underwriting a loan should be no different.

This business model preys on people who don't or won't consider the cost of credit against the "I want it now" model of American capitalism. It's taking money from those least able you afford it. The entire model isn't the informed consumer making a decision based on their immediate needs vs. their financial interest. It's literally a business model that accommodates and actively seeks out people who don't know better, but see it as a way to emulate responsible credit users. I can't tell you how many high school buddies of mine think that any credit is better than no credit and I've had to explain why that's untrue.

I hold this on the same level as Medicare fraud and payday lending. A loan shark would blush trying to sell these rates.

 

[JackRab]

Isn't that similar as to how AfterPay works? Maybe AfterPay is more focussed on the paying off bit and this Affirm focussed on lending longer term?

 

[HeSaidSheSaid]

"American merchants paid more than $40 billion to process debit- and credit-card transactions in 2015". this charge is bad for small businesses.
Paypal & Square are new comers, their charges are little cheaper.

 

[Sig]

"American merchants paid more than $40 billion to process debit- and credit-card transactions in 2015". this charge is bad for small businesses.
Paypal & Square are new comers, their charges are little cheaper.

I don't know that they're cheaper, just a heck of a lot easier and more convenient to set up initially. If you have a brick and mortar store processing credit card transactions for physical goods, you should be able to beat Paypal and Square by quite a bit through a traditional card processor, the whole thing is just a massive pain in the ass.