101–110 of 119 posts
Yeah I really didn’t like this deal when it was first announced. Plaid has a ton of bank account and transaction data on competitors to Visa that gives it a ridiculous advantage over its competitors.
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An idealised race to the bottom which just eats into excessive profits would be great. But typically companies want to maintain their margins, so it's the staff that get squeezed, or the service, or the ethics, or all of the above. And it often ends up warping the market so that choice is removed, a premium economy does not always spring up. To take your TV example, modern mainstream TVs now bundle spyware/malware/ad…
We could fix it with better regulation of product information though. No one seriously argues against weights and measures legislation. We've supposedly had an information revolution but I still can't really trust any source of product information online.
Another good example is FDIC insurance. We could have little to no banking regulations, but that would also introduce a lot of uncertainty and result in wild swings when the economic situation changes. Tell depositers that the gov't will back their savings helps stabilize the banking system which actually benefits the market (the same way a stable and predictable government/legal system benefits the market).
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We could fix it with better regulation of product information though. No one seriously argues against weights and measures legislation. We've supposedly had an information revolution but I still can't really trust any source of product information online.
This is a fair comment. The free market can certainly be made "better" (however one might define it) by certain interventions. Your example of weights and measures is a good one - the market benefits from an increase in knowledge of both parties in a transaction. Another good example is FDIC insurance. We could have little to no banking regulations, but that would also introduce a lot of uncertainty and result in wil…
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> Were airlines very different in the past? Yes, they were much more expensive, but used to provide more for free. There was a time they even had legroom. https://www.theatlantic.com/business/archive/2013/02/how-air...
Air travel has become so cheap you can pretty much subsidize 3-4 domestic trips a year with a good rewards credit card and flexible dates. I am not sure this is a net win for my personal happiness as I rarely take these trips for fun reasons.
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To a certain extent, it is detrimental if the prices are lower than the transaction expenses. Because you have to pay indirectly which is even worse
Can you elaborate on this?
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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…
So why not force the opening of the walled garden in law then? The EU has PSD2 now which forces all banks to have open APIs. We have multiple Plaid-like competitors providing the platform on top of those APIs. But it wouldn't have happened without regulation. Generally innovating through regulation is bad and I don't support it. But I think the aversion to it in the US is what creates these monopolies in the first pl…
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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 uses ACH under the hood (it's one of only two options, the other being wire transfers which are expensive and often even need to have humans in the loop). So they guarantee the payment to the seller, and then as the buyer your bank account gets charged up to a day later when the ACH batch processing goes through. If you don't have enough money in your bank when that happens, it gets rejected and Paypal takes on that loss unless they can recover it from you via collections system.
To limit their risk, Paypal even uses Plaid in some cases to check your bank account balance before deciding whether to allow your payment to go through! But even that isn't a guarantee, because you could always have made multiple ACH payments that day of which some might go through and some could fail due to lack of funds. It's like trying to prevent a race condition in a multithreaded program by just checking the value again closer to where the race occurs, it might make the issue happen a little bit less often but to actually solve the problem you need certain atomic primitives which the US bank transfer system completely lacks.
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Zelle still uses ACH under the covers.
Zelle is real-time, while ACH is not.
From the perspective that instant payments should be an inexpensive, accessible utility for the benefit of all citizens, the Fed's FedNow efforts are preferable to Zelle or legacy ACH services.
[1] https://en.wikipedia.org/wiki/Zelle_(payment_service)
[2] https://corpgov.law.harvard.edu/2020/08/31/fednow-the-federa...
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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.
They basically guarantee the funds to the merchant and reduce the likelihood that the cash won’t be there. The other side of the coin is providing insurance against fraudulent charges. This only really matters where physical goods are exchanged.