Float

[Neuk_]

Has anybody used this before when shopping online?

| The Better Way To Credit Card

Buy what you want now using your credit card and pay it off over up to 24 monthly instalments. No interest. No fees. No sign up.

www.float.co.za

My wife is looking at it as the online store is offering something free on the purchase if we use float instead of paying outright. I am naturally skeptical and believe if that it sounds too good to be true...

 

[ld13]

Used it last week for the first time, nothing shady going on. Works like a charm.

So for my ~R10k purchase they put a hold (authorization) on my credit card for the whole R10k, but charged like R1666.67. Next month they will place a hold of R10k minus the R1666.67, and put through a charge for R1666.67. Rinse repeat for the 3/6/12 months.

This way, you only need to worry about the R1666.67 odd every month, and are not charged any interest etc. They also do not charge any admin fees or anything, as one would have to pay with mobicred.

Edit:, here is my actual breakdown:




Edit 2:
@Neuk_ what store is offering something free when using float?

 

[DrJohnZoidberg]

Used it last week for the first time, nothing shady going on. Works like a charm.

So for my R10k purchase they put a hold (authorization) on my credit card for the whole R10k, but charged like R1666.67. Next month they will place a hold of R10k minus the R1666.67, and put through a charge for R1666.67. Rinse repeat for the 3/6/12 months.

This way, you only need to worry about the R1666.67 odd every month, and are not charged any interest etc.

Any idea what their actual business is then?

I would guess they're likely selling data to advertisers but I don't feel like reading through pages of terms right now.

 

[ld13]

Any idea what their actual business is then?

I would guess they're likely selling data to advertisers but I don't feel like reading through pages of terms right now.

They are a merchant, with a pool of money, I guess. They charge the store a fee in the end for what amounts to a low-risk loan. At least, that would be my guess.

 

[Neuk_]

Used it last week for the first time, nothing shady going on. Works like a charm.

So for my ~R10k purchase they put a hold (authorization) on my credit card for the whole R10k, but charged like R1666.67. Next month they will place a hold of R10k minus the R1666.67, and put through a charge for R1666.67. Rinse repeat for the 3/6/12 months.

This way, you only need to worry about the R1666.67 odd every month, and are not charged any interest etc. They also do not charge any admin fees or anything, as one would have to pay with mobicred.

Edit:, here is my actual breakdown:

View attachment 1404195


Edit 2:
@Neuk_ what store is offering something free when using float?

Thanks That is how I understood it but am still struggling to see how their business model works if they charge no fee's or interest and as I said, I am way too skeptical.

I don't know the store my wife is buying from, it is for furniture though, the store was offering a free ottoman with the couch we are looking at.

 

[DrJohnZoidberg]

They are a merchant, with a pool of money, I guess. They charge the store a fee in the end for what amounts to a low-risk loan. At least, that would be my guess.

Ah, I found something in the Merchant FAQ.



Ye, so all the cost is on the merchant side.

 

[ld13]

Thanks That is how I understood it but am still struggling to see how their business model works if they charge no fee's or interest and as I said, I am way too skeptical.

I don't know the store my wife is buying from, it is for furniture though, the store was offering a free ottoman with the couch we are looking at.

Payflex is the same, no fees etc. They all pass along the fees to the store. It might be slightly more than what another merchant like Capitec or Payfast might charge, but you have so much more to gain:

It is economics 101, in the end, you ultimately reach a limit in terms of what your customers can spend. The only way for you to grow then, is to increase the spending power of your client base. One such method is to introduce credit, increasing their spending power and in turn an increase in sales.

But selling on credit requires an NCR registration, an application process, credit vetting, statements, invoicing and collecting of arrears etc., a big mess and not always worth it.

That is where your payflex, float etc services come in. Handing over a small fee and e.g a ~5%+ of the value of the sale could more than cover any costs/issues you might encounter when trying to offer your clients credit directly.