this post was submitted on 23 Dec 2024
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I have been using PayPal increasingly for online payments. Not sure why. I have heard old stories about PayPal but Honey seems really bad. Its basically a given that any fintech company are going to be dodgy scammers but PayPal seemed almost grown up and respectable. Guess not.
I use Klarna for basically everything I buy. I should probably reevaluate that. But I've had no issues so far. It notifies me when my payments are due. Helps me collect the sum of what I owe each month, each week. Helps me group payments to pay similar/connected things simultaneously, categorize purchases, etc, etc.
I really hope there's nothing dodgy going on there. But at least I'm not giving them interest on anything I buy. Always make sure I'm paying my stuff on time, and no postponed payments.
I'm guessing their business model is to exploit people who have issues paying on time and to collect interest and late fees, as well as receive convenience fees from stores implementing Klarna as a payment option.
In 2023 they got a 1.1 million SEK fine for breaking the law that regulates working hours. To "allow" (strongly encourage) your employees to work nightshifts you need a collective agreement approved by the union, which they didn't have.
More recently, they got a 500 million SEK fine for skirting the anti-money laundering regulations in Sweden.
The whole "buy now, pay later" deal is a credit loan. They are most likely paying the merchant directly and using your loan as collateral to speculate on the market, until you pay them back for that loan. If that's true, they are making profit on the interest gained from your loan.
Correct. Like all credit banks they promote the "buy now, pay later" option before direct payment, which is becoming a pandemic on our society. Hardly any user interaction needed. They also offer their own payment plans which encourages buying even more expensive items you cannot afford.
I'm not very educated in economics, so I'm struggling to understand this. Is there a way to easily explain this? I'm 38 so... please use big words if you like, but simple domain language. π
Yeah. I definitely don't think I'm the target audience for their service. Paying everything on time, every time. Buying only what I can afford. Etc.
Maybe use privacy.com instead (they also have an app), they can generate virtual credit cards and you can set limit is (one time payment, or monthly $10 only, etc). Itβs great if you need to cancel something or if they try to charge you extra. Saved me $150 when boost tried to charge me 1 year after I bought a phone from them!
Itβs also great for predatory services like GYM membership that you canβt cancel.