by mckee1 on 9/19/18, 3:58 PM with 64 comments
by endorphone on 9/19/18, 5:41 PM
Many suppliers demand 0 day terms now: You pay with a credit card or wire upfront, often before service or goods are even provided. Certainly for everything under a few thousand dollars, and often even for five digit purchases. Yes, even large companies.
Oh, your super big company wants net 60 (or they'll threaten net 90)? If that even is offered, the vendor almost certainly adds a time and risk premium to the cost (that "early payment discount" is actually the real price. the net 30/60/90 prices are heavily penalized).
Vendors aren't your creditors. Certainly random individual freelancers aren't. The notion that you, the customer, start a relationship with a payment company that demands a fee to get paid is absolutely ludicrous. Despite all of the splitting of hairs, it is far closer to a payday loan than it is factoring (FastFunds/WorkMark or whatever has their relationship with the publisher, not with the freelancer who just wants his cash, much less at the usurious prices).
What a world when even the people of HN are defending these practices.
by maerF0x0 on 9/19/18, 4:40 PM
Today payments are easily automated and extremely inexpensive. I see little reason one couldnt be paid at the end of a work day or even more continuously such as per calendar day or what have you (ie there are ~22 work days per month, but ~30 calendar days) ... I could see a good pro labour legislation being to get paid daily for companies with automatic deposit or over size X.
Things like payday loans wouldnt make as much sense if you've already been paid 14/15ths of your pay up to that point and you're going to get the last 1/15th within 24 hours.
Edit: Something like this: https://www.uber.com/info/instant-pay/ but automated and for everyone.
by ljoshua on 9/19/18, 4:58 PM
I've done plenty of freelance work and I deeply know the pain of getting paid late, but as others have pointed out, dealing with a larger business results in net 30/60/90 terms, when things are going well. The fee you pay to the intermediary is justified.
Now if the only option to ever get paid was to pay an intermediary a cut of your salary, well then that would be a major issue. But otherwise this is the freelancer paying an intermediary for a) quicker access to funds and b) reducing the (albeit often small) risk of the client not paying.
by stanleydrew on 9/19/18, 4:33 PM
by AJ007 on 9/19/18, 4:55 PM
If the company goes under while you are waiting to be paid, you end up with $0. Someone else is borrowing money, paying you in advance, and eating shit if they collect nothing from it. Not even close to payday lending in analogy..
by edw on 9/19/18, 6:26 PM
The client quotes the freelancer a due-on-receipt, net-zero-days price and then offers a "no hurry payment" bonus of twenty-five or thirty percent or whatever that comes with net-30/60/90 terms.
If a freelancer doesn't ask about payment terms when negotiating payment with a new client, he or she will quickly learn to do so. You don't need to experience the sting of learning that your client intends to pay you net-120 more than once before you focus like a laser on payment terms and conditions.
When I engage with freelancers or small businesses as vendors, I make a point of making sure the accounting folks know a particular vendor should not be subjected to "cashflow optimization," which I have known AP folks to elevate to an art, a sport, perhaps even a tenet of a fanatical religion.
A couple of related items:
Why Variable Pricing Fails at the Vending Machine: https://www.nytimes.com/2005/06/27/business/why-variable-pri...
Coke’s Segmentation Error: https://pragmaticpricing.com/2010/05/15/cokes-segmentation-e...
by tedunangst on 9/19/18, 4:51 PM
by mywittyname on 9/19/18, 5:02 PM
Once that happens, payments will magically be made as quickly as possible. Fast payment processing is a solved problem.
by s_dev on 9/19/18, 4:49 PM
https://www.theguardian.com/business/2018/aug/30/wonga-colla...
by madebylaw on 9/19/18, 5:06 PM
- We are paid back by the company on payday so the credit risk is on the company not the consumer.
- Many (most?) of our users do not have access to consumer credit and would be classified as underbanked / unbanked. This is a great book for more background: https://www.amazon.com/Unbanking-America-Middle-Class-Surviv...
- We charge a fixed fee per transaction, no interest is accrued or carried.
- Philosophically, every day you work and are unpaid for it, you are selling your employer an interest-free bond of your labor whose term is payday.
by edawerd on 9/19/18, 5:50 PM
Flexible Pay enables employees to cash out unpaid earned wages, without any changes to how payroll runs. Happy to answer any questions about it. Also, if this is a space you're passionate about, we're actively hiring engineers for that team!
by dwighttk on 9/19/18, 5:04 PM
And "for everyone"? Not really.