As if we didn’t already have enough ways to saddle ourselves with debt, Vox is reporting that an entirely new channel is rapidly gaining prominence — what they call “point-of-sale installment payment services” — and it’s dedicated almost entirely to the copping of jawnz.
Offered at retailers of all sizes — Urban Outfitters, Everlane, and Steve Madden have all adopted versions — the idea behind companies like Afterpay, Affirm, Quadpay, and others is to “provide cheaper loans to young consumers wary of taking on more than they can pay at a given time.” The approval process apparently takes minutes and is far less rigorous than what is required for a line of credit, which sounds not terrible.
But as the story notes, these services can act as “a piecemeal shopping debt trap,” and are generally “more [of] a service for retailers,” as they make it possible for consumers to buy things they literally can’t afford, putting more money in retailers’ pockets. And, not surprisingly, that makes most retailers actively “promote the lender to customers, with the knowledge that they’re likely to buy more when they don’t immediately feel the price.”
Making matters worse, these companies aren’t regulated the way other credit providers are, nor are they likely to be anytime soon. Due to “regulatory rollback and the defanging of the Consumer Financial Protection Bureau under President Trump, the federal government seems less likely to pursue the regulation of existing financial products, let alone new ones, than it has in years.”
“Increased debt is not increased affordability,” the story said. “This is not feeding an appetite; this is proactive, not reactive service. And it’s only just beginning.”
You can read more about it at Vox.
