I think this would be more informative if it dropped all moral pretense and just talked about the economics objectively. If we’re gonna call a spade a spade, bnpl is one of a dozen services that extracts money from those whose judgment we doubt (like gambling, lottery, junk food?, drugs, overpriced status-symbol vehicles, or even “digital goods”).
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But if you read the article, it doesn’t? bnpl makes its money off charging merchants a few points higher service fees than cards, which for a lot of merchants is worth it to close the deal.
(Unstated in the article is that richer people with better credit have regular access to no-interest/negative fee consumer loans on the order of 6-18 mos., so they have no reason to use BNPL)
I seriously doubt the long-term viability of BNPL for merchants. Sure, in the short-term it boosts sales because people who don't have money are able to purchase stuff, but eventually those marginal consumers will end up exhausting their BNPL credit as well. Meanwhile the merchant ends up paying 5% on a bunch of transactions for people who could easily afford to pay now, but don't because it's "free". The only way this model works long-term is if they get enough leverage to force merchants to offer BNPL at the same price as cash, the same anti-competitive model used by credit cards.
Only if we assume that the existence of BNPL won't change consumer habits.
I think food is easy to buy impulsively ("I'm hangover and hungry - let's order some pizza delivery"), and removing barriers like "I don't have money right now" may cause - hypothetically - some people to spend more on food delivery and (by necessity) less on other things. I'm not sure how sound this model is, but I think it can't be ruled out.
Needles to say, I'm not sure if such change would be a good thing.
I agree about the viability, but it's the BNPL providers that are left holding the bag here, not the merchants. If it appears to boost sales sufficiently that the 5% fee is worth it, then businesses will continue to offer BNPL as long as the BNPL checks don't bounce.
I suspect that at some point, the fact that BNPL usage tracks with bad credit will catch up to the BNPL providers and we will see some sort of shift to the status quo, either in terms of ease of getting a BNPL loan or the way BNPL treats their clients.
> bnpl makes its money off charging merchants a few points higher service fees than cards
Restaurant food is a low to very low profit margin business that takes years to break even – with a good strategy and management.
Charging the merchant, i.e. the burrito service provider, means that they will inevitably have to pass costs onto the burrito consumer at the consumer's disadvantage.
But why would the merchants willing to pay the fees in providing a BNPL scheme for their customers?
One would assume that it would increase sales, which makes it worthwhile. It's not caused by increase outreach though: from what I've seen, BNPL is usually an additional payment option when you're already on the product page.
Then the question becomes: who are the extra customers that a BNPL scheme would bring, that wouldn't have made the purchase if such a scheme was not available?
Oh it absolutely does come with increased outreach. The BNPL providers have apps marketing deals to users
The extra customers are people who can’t afford to buy whatever nonessential product is being hawked, unless it is on a payment plan.
BNPL just encourages overspending by the most precarious consumers, ensuring that they will never get ahead.
Why do we have to discard the morals of a business to judge it "objectively?"
You don't and you shouldn't. GaaP even has regs for "intangible assets" which, among other things includes "branding wrt prevailing market mores".
Because morality is inherently subjective
You state this as if it's a fact but I think most people would disagree.
If morality is subjective, then that means there is nothing objectively wrong with murder, rape, pedophilia, chattel slavery, or any number of things that most civilized people would find abhorrent.
I'm not even trying to make a religious argument about the source of some objective morality, I don't think it's necessary to solve that to answer the "objective v. subjective" question.
> If morality is subjective, then that means there is nothing objectively wrong with ...
Yes, this is a true statement. Subjectivity and objectivity are two different things.
But I will grant you, there are plenty who believe in an objective framework for morality. My earlier statement is not universally agreed upon.
This quickly devolves into semantics as you pointed out.
Do you mean that reasonably all people agree that murder, rape, pedophilia, etc. are bad? Aka if close to everyone thinks something, then that's an "objective" opinion? If so, that makes sense.
However, the parent comment may mean to say that wrong and right are qualities that humans place on things/events/communications... and I think that makes sense.
Physics/chemistry/math has nothing to say about vice and virtue.
> Physics/chemistry/math has nothing to say about vice and virtue.
Leaded gasoline.
What does physics, chemistry, or math have to say about the vice or virtue of leaded gasoline? What's the equation where the right side says "good" or "bad?"
> > Physics/chemistry/math has nothing to say about vice and virtue.
> Leaded gasoline.
Again, as GP mentioned, there's a failure in linking how (Physics/chemistry/math) imposes morality on (leaded gasoline): Any moral opinions on this subject are within the broader context of how it affects humans (negatively).
Physics/chemistry/math, in isolation, do not impose morality.
The other way around. What does leaded gasoline have to say about the connection of physics/chemistry/math to the concepts of vice and virtue.
What do we know, today, that might connect these in people's minds?
There isn't anything objectively wrong with those. You can still derive a functioning society from selfish principles. I don't want to live in a society where I can just get murdered, so I am fine with outlawing murder.
This is philosophically valid, but also has the advantage of being how moral systems are actually constructed in practice.
The ancient Romans had far less of a problem with all of those things than many people do now; would you consider them uncivilized?
I said nothing about how "civilized" anyone is. You can be a civilized person and be completely immoral. They're unrelated.
Game theory has an objection, your honor!
Some kinds of mores are more cooperative, and some are more destructive, and especially self-destructive. The good is usually associated with more cooperative and mutually supportive traits, and evil, with destructive. The good usually prevails in the long term because cooperation is more efficient than destruction.
So yes, there are objective correlates in good and evil traits, even though they are rather statistical than unequivocally causal.
Then the judgement will vary based upon the person. That doesn't make it inherently less credible.
Sure, but it absolutely stops it from being objective.
Then where does the subjectivity come from?
Your statement is pretty subjective! Not going to defend gambling but "junk food" and "overpriced status-symbol vehicles"? Digital goods as an entire concept?
You can think it's all for the stupids, but I'm not seeing how it's some objective truth. Even if you're some stoic who thinks spending money on leisure is just incorrect at a fundamental level, but I think you're going to find yourself in the minority there.
No, rather I think I can scrape by for the few days it takes to get ahead of the curve for something as cheap as a burrito and then next month I can afford 5 burritos for every 4+interest I could only afford before. Paying for a PS5 or TV on credit I can see because it might take me months to save. But saving for a burrito is arguably something I shouldn't even have to save for in the first place.
> But saving for a burrito is arguably something I shouldn't even have to save for in the first place.
I'm guessing you never has so little money that the calories you spent to get cheap food on Taco Tuesday was probably more than what it took to pedal your bike up to Del Taco? Yeah, that was a soul-crushing day.
Honestly, this would have been a bad plan for me because it often came down to the choice between 'go get a cab' and 'starve to death' as I could get some cash calls immediately after picking up a cab in order to not starve to death.
This scheme is clearly targeting the financially irresponsible, like myself, to pawn off the debt on others with their Burrito Backed Securities. Maybe we can take a moment to reflect on how the Mortgage Backed Securities debacle worked out?
To be clear I think the BNPL thing laid out here is Bad(TM), I just got there through my belief system about how society should be organized.
I do not believe that life is measured in how many burritos I can or cannot get access to, so the idea that not using BNPL means I'll get more burritos next month falls a bit flat on me.
Huh, I am trying to maximize my burrito access, but there is a time-cost to burritos. If I am hungry today then a burrito now is worth more than 1.2 burritos a month from now.
Really, it seems more reasonable to use BNPL to purchase a burrito than a PS5.
To take it even further, why does being in the minority matter at all? Curious what your motivation is for mentioning that aspect.
If you think that objectively spending money on leisure is bad, my claim is that you are in a minority with that thought process.
My implication here is not that being in a minority changes whether something is objectively true or not (it doesn't!). But I will outright say that I do not believe this, and I think that most people do not believe this.
Claiming to believe that leisure is bad objectively is, in my opinion, also a claim that you are "smarter" than the vast majority of people. After all, you have unlocked some reasoning to reach this, that other people seem to have missed. Do you believe to have unlocked some deeper truths through thought? Perhaps! I tend to assume I am far from the smartest person in the room.
Objectivity is the load bearing thing here, of course. If you merely think spending money on leisure is bad, then that's what you think. That can be one of your axioms in your belief system. Stating it as some objective fact is a much stronger claim, that I don't think really holds up to much scrutiny.
This is even before getting into the idea of "objective badness", which is a can of worms.
A lot of work to try and claim objectivity on your side, when the much easier "my belief system is like this, and from that I conclude this other thing" is a perfectly respectable argument when discussing policy preferences.
Added bonus of being honest about what part of your argument is just a belief system is you can then more quickly identify why you disagree with someone else.
Sorry to press, but I'm not sure if you answered my question. Why mention that you think most people do not believe it? In your latest comment, you didn't justify, but you did "outright say" it again. What value does bringing it up have?
Not trying to be combative, just thought it's an interesting point in this discussion of objectivity vs subjectivity.
I'm just saying I doubt that zug_zug has actually unlocked some chain of reasoning to say that all that stuff is objectively bad. If they did, what's stopping everyone else from doing it? I am expressing doubt.
Like if someone showed up and said "I can predict lottery numbers". Maybe I'm talking to someone who has figured it out. Maybe I'm talking to someone who is wrong. This isn't at the same level but the claim to objectivity feels pretty close to me!
I think zug_zug's claims are based in a worldview, and not derived from some objective truth. That's fine! We are allowed to inject our own preferences into these discussions! It feels intellectually dishonest to pretend that we're working off of some objective truth of how the world "should" be.
> If they did, what's stopping everyone else from doing it? I am expressing doubt.
This is a pretty interesting topic on human nature. Chain of reasoning doesn't always result in proper action. For example, my cousin has been having a lot of health problems lately. Logically he knows that alcohol is contributing to them. Yet, when he's out with his friends, he can't help but drink anyway, despite knowing (and likely ignoring for the moment) the consequences of doing so.
Similarly, things like junk food and overpriced status-symbol vehicles have objective costs that prey on the weaknesses of human nature. Whether to restrict such things, and by how much, is where the subjective aspect comes in.
This also all presumes we share the same values of "let's try to reduce human suffering somewhat". A libertarian, for example, would just say "live and let live".
Right, totally see what you're saying. In the junk food example (assuming fast food a la McDs...) it feels fairly noncontroversial to say there's health costs. Just then you get into convenience discussions (or even just enjoyment discussions) and now you're weighing health vs convenience and these are totally not fungible quantities. So you're already veering into subjectivity if you're saying "on balance it's bad".
There has to be a point at which you pull in preferences. But at least then you can split the "objective" from the subjective, and think about the details in earnest. Even when conclusions differ.
>If you think that objectively spending money on leisure is bad, my claim is that you are in a minority with that thought process.
Strawman. The topic at hand isn't about spending money on leisure but taking out a loan to pay for a fucking burrito.
This is meandering a bit (and I'll once again state that I think Burrito Now Pay Layer is Bad(TM)), but the flow here is (forgive the paraphrasing):
- zug_zug said "we should talk about economics objectively" and claimed "bnpl is one of a dozen services that extracts money from those whose judgment we doubt" , giving examples of other services in that category
- I replied to that claim, saying that I believe their claim that, for example, junk food is a service that extracts money from whose judgement we doubt, is likely to be a subjective analysis and not an objective one.
- I further said that I think you could end up with a believe that it was an objective analysis if you are a person who has reached the conclusion that spending money on leisure is bad
- I am then claiming that I doubt that there's an objective chain of logic that gets you to "spending money on leisure is bad". My reasoning is that I believe that to not be the position held by many people, on top of my belief that generally most people are not extremely smart.
Absent the "spending money on leisure is bad" claim, I don't see a claim to saying that, _objectively_, junk food, sports cars etc is an indicator of people applying bad judgement. And so saying "well BNPL is objectively just yet another stupid tax" is not a well founded argument in my opinion!
"I think Burrito Now Pay Later is bad" is a fine statement, and doesn't try to apply a layer of objectivity that, in my view, crumbles pretty quickly.