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Justice Department Sues to Block Visa's Proposed Acquisition of Plaid

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Re: Justice Department Sues to Block Visa's Proposed Acquisition of Plaid

#41

Post by Ericson2314 »

mitchellst wrote: post #12
todipa wrote: post #5

Government's argument rests on the fact that Visa shouldn't acquire Plaid because of the potential technology they might create. This is a really dangerous argument. This is a direct quote from the plaintiff's argument: "While Plaid’s existing technology does not compete directly with Visa today, Plaid is planning to leverage that technology, combined with its existing relationships with banks and consumers, to facil…

- Plaid is hardly alone in its competitive space. Even if Finicity sucks and SynapseFi is mid-implosion, they don't have a corner on capabilities like this indefinitely. MX is pretty alright. - That ignores FANG platforms that could implement similar money-moving features. - Stripe trotted out their "Banking as a Service" APIs today. - Let's not forget the Chinese giants that have obviated the day-to-day need for cre…

If the fintech revolution is just around the corner, then how about we just delay these acquisitions a little just to safe?

(In reality, I think the only fintech revolution that might be around the corner is new services the federal reserve rolls out)

Re: Justice Department Sues to Block Visa's Proposed Acquisition of Plaid

#42

Post by jjmorrison »

mitchellst wrote: post #12
todipa wrote: post #5

Government's argument rests on the fact that Visa shouldn't acquire Plaid because of the potential technology they might create. This is a really dangerous argument. This is a direct quote from the plaintiff's argument: "While Plaid’s existing technology does not compete directly with Visa today, Plaid is planning to leverage that technology, combined with its existing relationships with banks and consumers, to facil…

- Plaid is hardly alone in its competitive space. Even if Finicity sucks and SynapseFi is mid-implosion, they don't have a corner on capabilities like this indefinitely. MX is pretty alright. - That ignores FANG platforms that could implement similar money-moving features. - Stripe trotted out their "Banking as a Service" APIs today. - Let's not forget the Chinese giants that have obviated the day-to-day need for cre…

Plaid is still (for some unknown reason) the only company that is able to do real time ACH transactions that bypass credit card companies in the US. All other companies still require long verification processes or high transaction fees.

Re: Justice Department Sues to Block Visa's Proposed Acquisition of Plaid

#43

Post by nobody9999 »

throwawaysea wrote: post #38
nobody9999 wrote: post #22

Earlier quoted context omitted.

>But really we need a revision of antitrust law for the modern era, and we need it to be enforced. What revisions would you like to see? The underlying activities that make up the behavior we call "antitrust" haven't really changed. I'd say the solution is much more about muscular enforcement than revising the law. That said, there may be something I'm missing here.

I'm being vague, but I think my concern is that the focus on "monopolistic behavior" is archaic. Harm to a healthily competitive environment can result from a few big players existing rather than a single dominant one. It may not even require certain "behavior" as much as a large entity with lots of capital simply existing. There are also big barriers to entry in any business that is built on network effects - even t…

>I'm being vague, but I think my concern is that the focus on "monopolistic behavior" is archaic.

I take your point. However, at least in the United States[0], the law does not require an entity to be a monopoly to engage in behavior that is anticompetitive and/or violates anti-trust laws.

In fact, the topic at hand (Visa's proposed acquisition of Plaid) doesn't have a "monopoly" component at all.

Rather, IIUC the DOJ is arguing that it runs afoul of section 7 of the Clayton Antitrust Act[1] which addresses mergers and acquisitions that limit competition.

I don't disagree with your assessment of the situation, but I do think that existing law (and jurisprudence expanding on that law) address the vast majority of the issues impact competition today.

[0] https://en.wikipedia.org/wiki/United_States_antitrust_law

[1] https://en.wikipedia.org/wiki/Clayton_Act_of_1914#Section_7

Re: Justice Department Sues to Block Visa's Proposed Acquisition of Plaid

#44

Post by WrtCdEvrydy »

propogandist wrote: post #37
semerda wrote: post #33

Earlier quoted context omitted.

Where they aren’t using APIs and instead the scrapers, does that mean they have your banking login credentials? Be curious to hear how they get around MFA.

Yes, they also can monitor and scan your financial transactions. Accepting their T&C and Privacy Policy gives them too much power, consumers are freely giving away access to their financial information for convenience.

> Accepting their T&C and Privacy Policy gives them too much power, consumers are freely giving away access to their information for

Re: Justice Department Sues to Block Visa's Proposed Acquisition of Plaid

#45

Post by nobody9999 »

Ericson2314 wrote: post #39
nobody9999 wrote: post #22

Earlier quoted context omitted.

>But really we need a revision of antitrust law for the modern era, and we need it to be enforced. What revisions would you like to see? The underlying activities that make up the behavior we call "antitrust" haven't really changed. I'd say the solution is much more about muscular enforcement than revising the law. That said, there may be something I'm missing here.

Override the caselaw to take "consumer welfare" off its special pedestal. The higher order effects are much more important, I would also allow sufficiently-employee-owned companies to be exempt in certain respects, to keep the co-op path to socialism open :).

>Override the caselaw to take "consumer welfare" off its special pedestal. The higher order effects are much more important,

What might those "higher order effects" be?

I'm not being snarky here, I'm just not clear what it is that you're arguing for that makes "consumer welfare" unimportant.

It's a provocative position, but you haven't given enough information to evaluate it. Any help you could provide would be greatly appreciated!

Re: Justice Department Sues to Block Visa's Proposed Acquisition of Plaid

#46

Post by vageli »

haltingproblem wrote: post #23
cactus2093 wrote: post #10

Earlier quoted context omitted.

It is quite a fascinating scenario. Apple and Google wallet are integrated into the credit card processing infrastructure. So they don't compete with Visa, their payments still go over Visa's rails. Plaid's killer feature has always been their private access to APIs that the banks won't give to anyone else. It's essentially like they're using modern web APIs while everyone else is using snail mail (i.e. ACH, bank tra…

Paypal has my banking details and can use those or credit/debit card to complete my payments. They always prefer to use bank because of no fees with cc/debit as backup. Google could do the same. ACH is really creaky and old. We need something like UPI (india) or Wechat (china) in the US. Zelle is a poor substitute.

> Paypal has my banking details and can use those or credit/debit card to complete my payments. They always prefer to use bank because of no fees with cc/debit as backup. Google could do the same. ACH is really creaky and old.

> We need something like UPI (india) or Wechat (china) in the US. Zelle is a poor substitute.

Why is zelle a poor substitute? I can pay people via phone number.

Re: Justice Department Sues to Block Visa's Proposed Acquisition of Plaid

#47

Post by dayjah »

semerda wrote: post #33
ceejayoz wrote: post #24

Earlier quoted context omitted.

They do some of both. When I link a Capital One account, I get an OAuth-style flow and the ability to select which accounts I share directly on the C1 website. The sites I use this on show up as "Linked Apps" in my security settings in C1. Others use the credentials-based flow.

Where they aren’t using APIs and instead the scrapers, does that mean they have your banking login credentials? Be curious to hear how they get around MFA.

My experience using plaid with Schwab, on which I have MFA, is that you need to add an MFA code to your password when connecting the two. It works for some duration (a few days?) and then loses sync and you have to re-enter the password+MFA combo.

Re: Justice Department Sues to Block Visa's Proposed Acquisition of Plaid

#48

Post by sjtgraham »

jjmorrison wrote: post #42
mitchellst wrote: post #12

Earlier quoted context omitted.

- Plaid is hardly alone in its competitive space. Even if Finicity sucks and SynapseFi is mid-implosion, they don't have a corner on capabilities like this indefinitely. MX is pretty alright. - That ignores FANG platforms that could implement similar money-moving features. - Stripe trotted out their "Banking as a Service" APIs today. - Let's not forget the Chinese giants that have obviated the day-to-day need for cre…

Plaid is still (for some unknown reason) the only company that is able to do real time ACH transactions that bypass credit card companies in the US. All other companies still require long verification processes or high transaction fees.

Plaid doesn’t do ACH transactions, someone else does, e.g. Stripe, or Dwolla. They merely provide a means to verify account details instantly per NACHA rules.

Plaid is planning to do ACH payments themselves and have a private beta.

Re: Justice Department Sues to Block Visa's Proposed Acquisition of Plaid

#49

Post by zelly »

Plaid is more of a monopoly than Visa is.

Plaid is literally the only way to do ACH without microdeposit verification. There is no reason Plaid should have a monopoly on this. If banks opened up APIs for bank account verification, then anyone could compete with Plaid.

As usual the Justice Department doesn't know what they're talking about.

Re: Justice Department Sues to Block Visa's Proposed Acquisition of Plaid

#50

Post by zelly »

koolba wrote: post #8
swiley wrote: post #3

When can we just use some kind of CA style PKI and let banks sign customers client side certs to sign payments? Having banks build payment networks from scratch with all kinds of weird fee structures, security problems, and other caveats really really sucks.

Doesn’t chip and pin do this already? Also, even with signatures you still need some way to reverse errant and malicious charges. Cryptography isn’t a panacea for solving all real world problems.

Yes, modern cards are basically YubiKeys. You can't trust people (such as bank employees) to maintain private keys. That would never work.

Maybe some kind of USB/Bluetooth device that can authorize your physical debit card can let online merchants debit bank accounts securely. I know they have had something similar in the UK for decades.

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