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A comment on The 'Buy Now, Pay Later' Bubble Is About to Burst. Parent comment

Re:The 'Buy Now, Pay Later' Bubble Is About to Burst by clintonb on Friday January 13, 2023 @10:33AM (#34369133)
You’re on the right track, but have the wrong specifics.

A merchant accepting card payments might pay “sticker rate” for processing, 3%, at the outset; but, they eventually get IC+ pricing as their volume increases. This might be closer to 1-2%.

If they pay 5% to a BNPL, that extra 2-4% is meant to cover the interest of the “loan” if the customer doesn’t pay back on schedule.

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Re:The 'Buy Now, Pay Later' Bubble Is About to Burst by jacobsimon on Saturday January 14, 2023 @05:18PM (#34384688)
Sure but the merchant isn’t literally paying interest - yes they get charged a fee which helps subsidize an interest-free loan, but that fee is not interest nor is the merchant party to any loans that the consumer enters. The merchant gets paid more or less immediately minus a fee - similar to how a credit card transaction works.
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