The New Old Idea
Growing out of the pandemic is a throwback called “buy now, pay later” or BNPL.
It was called a layaway plan back in grandma’s day.
BNPL is a point of purchase financing. In essence, a lender pays for your purchase and you pay them back in installments. Some companies charge interest, but many make money on late fees.
Some of the bigger players in the field include PayPal, Affirm, Klarna, Afterplay, Split, Zip, and Hoolah.
A Growth Industry
Fintechs, such as the firms mentioned above, have taken the lead in BNPL. As a result, they have siphoned off a large chunk of change from banks, according to a recent report.
McKinsey & Company says banks need to get on board soon.
“Thus far, fintechs have taken the lead, to the point of diverting $8 billion to $10 billion in annual revenues away from banks,” said McKinsey’s Consumer Lending Pools data. “In our view, only a few banks are responding fast enough and boldly enough to compete. Banks that underestimate the threat may see a continued loss in share and could lose out on participating in a growing value pool and gaining share among younger and new-to-credit customers, as banks in Australia and China did when facing a similar situation.”
Expanding Offerings
Digitalization and an increase in merchants offering point of sales financing are cited as reasons for BNPL’s popularity, according to McKinsey. However, a big force pushing the trend is younger consumers.
About 60 percent of consumers surveyed by McKinsey say they expect to use BNPL financing over the next six to 12 months.
Regulator Interest
The rising popularity of point-of-sale financing has attracted regulatory interest.
The Consumer Finance Protection Bureau (CFPB) opened a probe into BNPL last week. The CFPB is seeking information on the risks and benefits of point-of-purchase financing.
“Buy now, pay later is the new version of the old layaway plan, but with modern, faster twists where the consumer gets the product immediately but gets the debt immediately too,” said CFPB Director Rohit Chopra. “We have ordered Affirm, Afterpay, Klarna, PayPal, and Zip to submit information so that we can report to the public about industry practices and risks.”
Risks To Consider
BNPL loans are convenient. That is why they are popular. They do not offer the protection of other purchase methods.
Risk of BNPL loans include:
- Fees. Most BNPL companies do not charge interest. However, they all have fees. You should know and understand them before making a purchase.
- Returns. You do not get out of your loan if you return a purchase to the store. That is because the loan is with the lender – not the store. As a result, you may have to continue paying on the loan until the issue is resolved with the BNPL lender.
- Disputes. BNPL loans don’t offer the same dispute protections as credit cards if the item you purchase is faulty or a scam.
Manufacturing On The Rise
American manufacturing has cause to celebrate as 2021 draws to a close.
The goods production side of the U. S. economy has posted steady gains in the fourth quarter and is forecast to build on that in the year ahead.
November’s manufacturing output climbed 0.7 percent. The month before that figure rose 1.4 percent.
Rebound In Automobile Production
A large part of those increases came from the automotive industry. Vehicle production has risen over 12 percent over the last two months. However, even without automobile production, manufacturing production increased month-over-month 0.6 percent in November and 0.8 percent in October.
Going For The Record
Manufacturing reached peak production in 2007 at 7.3 percent above the current rate. However, increasing orders lead ING to speculate that figure may be surpassed.
James Knightley, ING international economist, notes that worldwide competition presents a challenge. Still, he sees reason to be hopeful.
“Nonetheless, with the ISM reports continuing to point to strong growth and the regional manufacturing surveys also offering encouragement with healthy order books we are hopeful that the sector can continue eating into this deficit through 2022,” writes Knightley.
2022 Looking Good
Orders for U. S. goods are steadily rising. That points to a rosy outlook for the coming year.
“The manufacturing industry is building back fast,” According to Research and Advisory firm Deloitte, “undeterred by significant labor and supply chain challenges.”
Deloitte notes that it is odd to see positive economic indicators coming at a time of labor shortages and supply problems. However, it notes that manufacturing began to recover mid-year. It credits increased vaccinations and demand for the anomaly.
“As industrial production and capacity utilization surpassed pre-pandemic levels midyear,” notes Deloitte, “strong increases in new orders for all major subsectors signal growth continuing in 2022.”
Hot Jobs Wrap-up
Payscale, a data and software company that helps employers manage compensation, has released its roundup of the 10 hottest jobs of the year for 2021. At the top is – wait for it – beauty consultant. Now, aren’t you peeved you dropped out of beauty school?
These are jobs that have grown fastest in Payscale’s database of salary profiles, according to the company. Those profiles were drawn from surveys of people evaluating job offers based on salary.
Profile growth for beauty consultants grew 79 percent in 2021, reports Payscale. In addition, Salaries for the position jumped 7 percent in 2021.
Payscale speculates that beauty consultants are more in demand because the economy is rebounding and more people are getting out. Then again, there is the money.
Payscale notes, “perhaps this position is attractive because it earns more than other retail positions.”
Related Positions
Similarly, Hairstylists have made a comeback in 2021. With the pandemic, many stylists struggled as customers sheltered at home.
The demand for hairdressers and hairstylists is “booming,” says Payscale. However, salaries have only increased three percent.
Also, retail sales associates are in high demand. The profile here is up 37 for 2021. In addition, wages have increased five percent.
Hiring Jobs
Unsurprisingly, jobs that help employers attract jobseekers and manage wages are in demand. Senior recruiters ranked number two on the list.
“Senior recruiters, recruiting coordinators, and compensation analysts also fall among the top 10 hottest jobs in 2021,” reports Payscale. “The COVID-19 pandemic and the Great Reshuffle has been particularly challenging on human resources, beginning with layoffs that wiped out over 20 million jobs in April of 2020. That situation has now boomeranged into a hiring frenzy as job openings and separations have cycled into a boiling froth.”
As a result, the profile for senior recruiters rose 38 percent, says Payscale. However, wages were static rising only two percent. Then again, many such positions offer a commission.
Part of the appeal of positions such as senior recruiter is flexibility. Half of senior recruiters work from home, reports Payscale.
Here’s The List:
- Beauty Consultant
- Senior Data Engineer
- Senior Recruiter
- Recruiting Coordinator
- Retail Sales Associate
- Social Media Manager
- Hairstylist
- Clinical Research Associate
- Content Strategist
- Compensation Analyst
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Max K. Erkiletian began writing for newspapers while still in high school. He went on to become an award-winning journalist and co-founder of the print magazine Free Bird. He has written for a wide range of regional and national publications as well as many on-line publications. That has afforded him the opportunity to interview a variety of prominent figures from former Chairman of the Federal Reserve Bank Paul Volker to Blues musicians Muddy Waters and B. B. King. Max lives in Springfield, MO with his wife Karen and their cat – Pudge. He spends as much time as possible with his kids, grandchildren, and great-grandchildren.
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