I mean cmon, you’re literally delaying payment for a long time. How does that benefit any business?
In: 29
Depends on the situation…businesses that offer third party payment options with companies like Affirm or Klarna will be paid immediately up front for the goods being sold by the third party. The third party then assumes the risk of collecting payments and interest. The initial business may give a kick back or a discount to the company offering interest free payments so that it is at least marginally profitable for the payments company. They process enough payments on a regular basis that they are able to make a profit.
Businesses that have in house financing – like a Best Buy or Home Depot credit card have actually separated that part of the business off as a second entity, so that their books are different and they operate is a very similar fashion to the examples above.
Latest Answers