Who Pays when you use After Pay, Zip, PayPalx4 etc.

[mel-world]

As someone who still believes 'cash is king' - or, at least, debts should be paid off in a reasonable time, I'm wondering who pays with these, and similar, payment methods.
If so, do you always pay on-time, how much does it cost if you pay late and who picks up the bad debts, the Company of the Merchant. If the latter, does this added to price we all pay?
I've been following the discussion on another thread about credit and debit card surcharges that got me thinking that we might all be paying another 'surcharge' to support those who want to buy now and pay later without interest.

 

[Peter D]

As someone who still believes 'cash is king' - or, at least, debts should be paid off in a reasonable time, I'm wondering who pays with these, and similar, payment methods.
If so, do you always pay on-time, how much does it cost if you pay late and who picks up the bad debts, the Company of the Merchant. If the latter, does this added to price we all pay?
I've been following the discussion on another thread about credit and debit card surcharges that got me thinking that we might all be paying another 'surcharge' to support those who want to buy now and pay later without interest.

I think the profits come from people who do not pay on time. The interest rates then become usurious.

 

[moa999]

Combination of the usurious breakage fees and much higher fees at the merchant end vs standard cc.

Merchants accept it because it brings forward sales but it becomes a drug they can't escape.

 

[markis10]

I think the profits come from people who do not pay on time. The interest rates then become usurious.

Profits come from the merchant fees in most cases, not the delinquent accounts, as an example Afterpay charges 6% of the purchase price while overdue accounts get a flat $10 charge.

 

[mel-world]

Profits come from the merchant fees in most cases, not the delinquent accounts, as an example Afterpay charges 6% of the purchase price while overdue accounts get a flat $10 charge.

Is this 6% added to the cost of the item charged to the customer who uses Afterpay or a cost of doing business adding to the price we all pay? I'd consider this a bigger surcharge, even if I'll never use Afterpay.

 

[markis10]

Is this 6% added to the cost of the item charged to the customer who uses Afterpay or a cost of doing business adding to the price we all pay? I'd consider this a bigger surcharge, even if I'll never use Afterpay.

6% is the amount deducted from the sale, so if I sell a $100 item After pay will remit $94.

 

[mel-world]

6% is the amount deducted from the sale, so if I sell a $100 item After pay will remit $94.

Thanks. I guess we all pay one way or another.

 

[Beer_budget]

An observation from someone who worked retail a long time - you make a mistake in comparing it to credit cards, from a business perspective. Most picked up Afterpay or similar to replace laybys, which are expensive in terms of space (which has a strict $ value in a physical store), staff time to follow up, insurance costs on goods no longer owned by the business, risk to the business of customer complaints etc. This guarantees the sale the same way, but if there are late payments or other issues, it's not your problem.

I feel like it's very similar to the other error the "cash is king" crowd makes, which is assuming cash has no costs to a business vs card transactions. Just because there's a clear % cost you can point to, does not mean the alternative is free, it just means you don't see the cost.