Buy Now,Pay Later?

Dateline: 29 July 2013

Most of my Planet Whizbang sales are transacted online and the payment part of the transactions are conducted through PayPal. Last year I paid nearly ten thousand dollars to PayPal in fees, and I'm just one small online operator. That leads me to think PayPal must be one of the biggest internet cash cows out there.

I don't begrudge them their money because I appreciate the service they provide. PayPal has enabled me to be successful with my homestead-based business. I'm just saying—that's a lot of money for not doing any physical work.

I do enough business with PayPal that a real, live person called me on the phone a couple years ago to thank me, ask if I had any questions or problems, and give me a phone number so I can easily contact a real person if I do have a problem. I was impressed.

More recently, I got an e-mail from PayPal regarding their new BillMeLater program. They wanted me to offer my customers the option of buying stuff like, chicken plucker parts and cider press parts, without needing to come up with the money right away. I didn't need to read the e-mail to know I wasn't interested.

Then, a few days later, Marlene came out to my shop, phone in hand, and held it out to me: "It's PayPal."

The woman on the phone asked me if I had a chance to look over the BillMeLater e-mail she sent. I had forgotten about the e-mail and was a little surprised to get the call.

I quickly gathered my thoughts (not an easy thing sometimes) and told the woman that I genuinely appreciated PayPal, and I could see where it would make good economic sense to have a buy-now-pay-later option, but I wasn't interested because I didn't want to be responsible for putting people into financial bondage. "If someone doesn't have the money to buy something from me, I really don't want them to buy it."

Then I said, "I don't suppose you hear that very often."

I was taken aback when she said, "Actually, you would be surprised how often we hear it."

Ms PayPal didn't try to change my mind. I suspect she knew she was dealing with some firmly-held ideology. Instead, she changed the subject and told me that I could save some money on the fees I pay by filling out a particular online application. I filled out the application, and was glad she called.

As for the revelation that there were other PayPal "merchants" out there who didn't want to participate in the buy-now-pay-later scheme, I pondered on that for awhile.

I came to the refreshing conclusion that PayPal merchants are probably mostly people who own some sort of small business. And those businesses reflect the personal morality (beliefs about right and wrong, good and bad) of the owners. And the morality of many of those owners must surely dictate that buying on credit is not a good thing. And, though they accept credit cards payments through PayPal, they don't want to be a party to anything more than that. It's kind of a "people over profits" way of thinking, and I'm glad to know about it.

Then I did a Google search of "buy now pay later" and came to This Web Page, wherein I learned that:

Between 1840 and 1890, four products—furniture, pianos, farm equipment and sewing machines—spread credit financing through the world.  

And they had this great picture of an old plow advertisement...

Further on, I read:

The single firm that did the most to bring the installment plan to the world was Singer Sewing Machines. Singer's machines were neither the best nor the cheapest products on the market. But the firm's innovative credit plan, inspired by piano showrooms near company headquarters tripled sales in just one year. By the 1890s, Singer Sewing Machine agents were notorious for their hard-sell "dollar down, dollar a week" tactics. The company's aggressive salespeople and easy payments made Singer one of the first multinational corporations.

Interesting, eh? Here's a picture to go with that bit of history:

All of which leads me to conclude that Planet Whizbang will never be a prosperous multinational corporation.... and that's just fine with me.