Why is everyone a bank?

#1

Post by kaushikktiwari » Mon, Nov 18, 2019, 8:13 PM UTC

Why is everyone a bank?
medium.com

Re: Why is everyone a bank?

#2

Post by majormjr » Mon, Nov 18, 2019, 8:46 PM UTC

This article seems to just be an advertisement for the authors new bank account?

Re: Why is everyone a bank?

#3

Post by kaushikktiwari » Mon, Nov 18, 2019, 8:49 PM UTC

majormjr wrote: post #2

This article seems to just be an advertisement for the authors new bank account?

its not an advertisement my friend. Just explaining how I see the world as someone who is working in it. Tried to be as unobtrusive as possible!

Re: Why is everyone a bank?

#4

Post by tlb » Mon, Nov 18, 2019, 8:51 PM UTC

Another answer: because regular banks are awful to deal with. They don't have nice APIs to just move money around. They apply velocity limits at surprising times. They can terminate your account suddenly for opaque reasons. They charge high regular fees and even higher "gotcha" fees if you make a mistake. They can take back money sent to you for up to 90 days, but often can't get back money you sent to crooks even if you discover your error the next day. And 100 other complaints.

So if you're doing something involving moving a lot of money around, you may need to be your own bank to make the whole system work well.

Re: Why is everyone a bank?

#5

Post by kaushikktiwari » Mon, Nov 18, 2019, 8:55 PM UTC

tlb wrote: post #4

Another answer: because regular banks are awful to deal with. They don't have nice APIs to just move money around. They apply velocity limits at surprising times. They can terminate your account suddenly for opaque reasons. They charge high regular fees and even higher "gotcha" fees if you make a mistake. They can take back money sent to you for up to 90 days, but often can't get back money you sent to crooks even if…

Def, you are right. Everyone is building on top of legacy banks but you hope that slowly the customer orientation will change to positive largely by better tech and more competition! Thanks for reading and appreciate the comment!

Re: Why is everyone a bank?

#6

Post by AllanHoustonSt » Mon, Nov 18, 2019, 8:56 PM UTC

Is the overwhelming debit spending vs credit spending an emotionally charged and risk averse rationale decision by the general populace or just unfortunate financial illiteracy?

Re: Why is everyone a bank?

#7

Post by kaushikktiwari » Mon, Nov 18, 2019, 9:02 PM UTC

AllanHoustonSt wrote: post #6

Is the overwhelming debit spending vs credit spending an emotionally charged and risk averse rationale decision by the general populace or just unfortunate financial illiteracy?

Access is the big one, risk-averse because of being burned in the past. Even missing a single payment means 25% APR+late fees, so likely to not put everyday expenses on credit. Use it more for planned stuff, like travel etc. The biggest irony is credit card rewards are a tax on the poor for the rich---merchants jack up prices for all but the rich spend and benefit!

Re: Why is everyone a bank?

#8

Post by Osiris » Mon, Nov 18, 2019, 9:12 PM UTC

Some cryptocurrency communities push the idea of "Be your own bank", especially with hardware wallets specifically because of this problem of having to trust / rely on custodians.

My sister-in-law had her accounts frozen for a year for something a business partner did. If she had all her money in her own hardware wallet, she wouldn't have lost access to her funds.

Obviously, being your own bank is hard from a security perspective, which is why most people are happy to outsource their banking to a custodian. Heck, even crypto people outsource to custodial accounts like Coinbase.