Phenomenal businesses that don't require any capital

[Parsad]

15 hours ago, Sweet said:

Apple Pay.  I use it almost exclusively now.  If Apple had their own card I’d see it as a risk to both MA and Visa.  I posted a topic in this a while ago:

https://thecobf.com/forum/topic/19573-can-the-visa-and-mastercard-moat-be-bridged/#comment-480798

 

I don’t see how Apple doesn’t go after this segment of business eventually.

 

Apple, and even Google, could do serious damage to credit card companies if they simply changed Apple Pay Later to an interest bearing loan that can be repaid exactly like credit cards at a lower transaction fee for merchants.  It would have a huge impact on the Visa/MC/Amex payment system and move more transactions off their network.  Cheers!

[sleepydragon]

1 hour ago, Spekulatius said:

Tobacco / Nicotine is very capital light, but it doesn’t matter because the business is shrinking by volume - at least combustibles do. So there isn’t really  any incremental dollar to invest.

The alternatives like heated tobacco and vaping area different story and require significant capital and marketing dollars to win market share. This business is not capital light at all.

 

I agree. In terms of addictiveness of the products, and capital light, social media companies wins (though not cheap)

[LearningMachine]

1 hour ago, Parsad said:

 

Apple, and even Google, could do serious damage to credit card companies if they simply changed Apple Pay Later to an interest bearing loan that can be repaid exactly like credit cards at a lower transaction fee for merchants.  It would have a huge impact on the Visa/MC/Amex payment system and move more transactions off their network.  Cheers!

 

Apple Pay could go one step further.   

 

Once it has enough market share, say above 30%, it will have the power to tell merchants that they need to accept Apple Pay directly e.g. through https://www.apple.com/newsroom/2022/02/apple-unveils-contactless-payments-via-tap-to-pay-on-iphone/, and merchants need to pay Apple higher transaction fees than they pay Visa/MC/Amex if they want access to higher-income Apple customers.  If merchants don't want it, they can say good bye to some of their 30% of sales. 

 

Similar to how AmEx is able to get merchants to pay higher transaction fees with much smaller market share. 

 

Apple wouldn't need to exercise the power in such a blunt way, but it can exercise it in more subtle ways, inch towards it slowly, and achieve the same result in the end.

Edited April 2, 2023 by LearningMachine

[dwy000]

Negative working capital companies like Dell, HP, and Amazon retail could be deemed to have little to no capital requirements if the negative WC offsets capex

[LearningMachine]

11 minutes ago, dwy000 said:

Negative working capital companies like Dell, HP, and Amazon retail could be deemed to have little to no capital requirements if the negative WC offsets capex

 

I know it is true in case of HP.  Maybe also true for some parts of Dell. 

 

With Amazon retail, if it doesn't include their delivery infrastructure, warehouses, etc., i.e. basically everything they are spending capital on, could have been true, but that's not the reality today. 

Edited April 2, 2023 by LearningMachine