

I know the solution, but it's illegal - peteforde
http://hackertourism.com/i-know-the-solution-but-its-illegal

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jeremysmyth
The suggestion in the article (instant-financing for online purchases, like
with auto-sales) will simply not work, for one reason: the majority of
purchases are not capital investments (as for example a car or a home), and
therefore quickly depreciate in value beyond the level at which a finance
agency can recoup costs in a repossession.

Until you fix the problem of defaulting, finance will be an expensive
proposition for unknown borrowers, too expensive for most non-asset purchases.

~~~
jcnnghm
Wouldn't credit cards have this same problem? It seems like most online
purchases are already instant-financed through credit cards, though credit
approval is done in advance. Credit cards are unsecured and the whole system
is largely based on the probability of the cardholder defaulting given their
payment history. I don't see how this is different.

~~~
jeremysmyth
Depends on your perspective. The vendor is covered by the credit card company,
and gets paid, so doesn't need to know anything about the borrower.

The credit card company doesn't want the borrower to default, so they do a
certain amount of checking before pre-approving the card to minimize that
possibility across their customers (and charge a premium across the board to
ensure they're covered even if some defaulters get through).

That's what I meant when I said "finance will be an expensive proposition for
unknown borrowers"; they're not unknown (to the financer, i.e. the credit card
company) if they have a credit card account.

~~~
jcnnghm
Nobody extends credit to "unknown borrowers". That's exactly why credit scores
exist, which map 1-to-1 with the probability that a borrower will default
prior to some horizon. This is a solved problem.

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logn
He says there's no US financing. Wrong. <https://www.billmelater.com>

~~~
mason55
Bill Me Later is owned by PayPal so it's not exactly poised to be a disruptor.

~~~
spullara
Well, it was poised to be a disrupter so PayPal bought it...

[http://profy.com/2008/10/06/ebay-acquires-bill-me-later-
to-m...](http://profy.com/2008/10/06/ebay-acquires-bill-me-later-to-merge-
with-paypal/)

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rquantz
Yes, we need another way for Americans to painlessly shop their way into ruin.

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acomms
Hey Pete - Alex from FinanceIt here (<http://www.financeit.ca>); thanks for
the mention in your article! We actually do solve most of the problems you
outlined in your article. Our current focus is on improving existing point of
sale financing systems for retailers - however we've developed an API
(<https://www.financeit.ca/api/v1/index.html>) so any developer can offer
instant approval financing online. I would love to connect anyone whose
interested with our API people. Message me at acommons at communitylend.com

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mempko
There is another fundamental reason industries would want to prevent this.
Competition is an anathema to capitalists. And citing Uber is hilarious
considering they are also disrupting the lives of not just the industry, but
their very own drivers. It is no wonder their drivers are protesting at their
headquarters.

Abuse is another way companies like Uber increase "competition".

So I wonder what kind of abuse instant financing would entail among strangers.

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scott_meade
"In exchange, they would agree to give up some percentage of their gross
profit on the transaction."

Sounds just like a commission. If the problem is "marketplace founders are
stumped when it comes to capturing any of that value for themselves", then the
existing answers include commissions and referral fees. Setting up instant
financing in order to have something to take a cut of may be a solution in
search of a problem.

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tocomment
Are there other solutions to this "matchmaker" problem? I've been thinking
about a start to match advertisers to local newsletters but I'm not sure what
my business model would be?

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jcampbell1
I am completely lost as to what this solves that credit cards don't already.
Things like Bill-Me-Later are fairly niche products.

~~~
acuozzo
It might be useful to people with bad credit scores.

~~~
haldujai
How would that work? How/why would you extend credit/financing to people with
bad credit. BillMeLater is subject to credit approval.

This could be disastrous and a recipe for bankruptcy if not managed properly.
My biggest concern with this software is what type of person is likely to
finance a $100 purchase from NewEgg, certainly not someone with good credit I
would hope. I only use BillMeLater because it's interest free so, however
minimal, I get 6 months of interest I wouldn't have normally gotten if I had
paid immediately. This doesn't sound like what the OP wants to do.

That said, I'd never NOT purchase because of a lack of BillMeLater or similar
services so it's not like adding this feature would give you access to new
customers.

What the OP proposes is basically a credit card company, it's not really
disruptive. Neither was BillMeLater.

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dllthomas
Have only skimmed, but ripple.com might be highly relevant here.

