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Debit cards are hidden financial infrastructure

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Re: Debit cards are hidden financial infrastructure

#241

Post by Avshalom »

klipt wrote: post #102
rjzzleep wrote: post #81

Earlier quoted context omitted.

What's transaction reordering? 1. have $10 in your checking 2. pay $9 for steak 3. fill account with $500 4. buy sausage for $2 bank reorders it as 1. have $10 in your checking 2. pay $9 for steak 3. buy sausage for $2 4. charge overdraft 5. count $500 deposit Is that what banks would do? I faintly remember that really old accounts I had in Germany had overdraft capability, but for all newer(last decade or so) accoun…

Yes they reordered transactions to maximize their money. E.g. you have $495 in the account, and you spend: -$5: $490 left -$5: $485 left -$5: $480 left -$500: -$20 left, overdraft fee of $40, $-60 left. They will reorder it as: -$500: -$5 left, overdraft fee of $40, $-45 left. -$5: -$50 left, overdraft fee of $40, $-90 left. -$5: -$95 left, overdraft fee of $40, $-135 left. -$5: -$140 left, overdraft fee of $40, $-18…

And of course even if you deposited a check that day it wouldn't clear until the next business day so you'd pay a negative account balance fee for three days before your money hit.

Re: Debit cards are hidden financial infrastructure

#242

Post by bool3max »

thrower123 wrote: post #226

Debit cards prey on poor people, who have been memed into thinking credit cards are dangerous. There is no good reason to use debit over credit in the US if you have the option, but I constantly see advice from people who should know better arguing in favor of debit. If someone steals your credit card and makes fraudulent purchases, your rent and heat and electricity bill checks aren't going to bounce while the bank…

Is that the only argument for credit over debit?

Re: Debit cards are hidden financial infrastructure

#243

Post by simonh »

capableweb wrote: post #227
clippablematt wrote: post #211

Earlier quoted context omitted.

Had five years or so of that awful cycle. It’s interesting when you meet people who haven’t experienced living under the brutality of the banking system. Overdraft, payday loans, high interest credit. They think it’s all fine. Fear of overdraft fees is a real class divider. One thing I really remember is being absolutely broke, and a guy from the bank calling to see if I’d be interested in taking on a credit card “we…

It seems to be a common theme that the ones who have been screwed by the banks or are currently being screwed by the banks are cheering for cryptocurrencies, while the ones with no experience of getting fucked themselves keep asking "But what problem does cryptocurrencies really solve? Seems useless to me because banks do the same thing"

If cryptocurrencies were actually being used significantly as currencies, you might have a point. My skepticism of cryptocurrencies has nothing to do with how they replace banks, because they flat out don't replace banks at all. Or rather, the extent to which they do so is trivial. I mean, if they were taking significant business from banks, wouldn't you think the banks would be lobbying to have it banned? But no, instead they think it's wonderful because it's another highly volatile new asset they can trade and provide services for.

I'm sorry, but the idea that crypto is sticking it to the man by disinter-mediating the banks is a crypto-cult delusion.

Re: Debit cards are hidden financial infrastructure

#244

Post by thrower123 »

oneplane wrote: post #147
TingPing wrote: post #20

Earlier quoted context omitted.

Just to clarify, many banks have no minimum balance and charge no fee to cash any check. However some may have a harder time opening accounts than others.

Wouldn't that be a good item for a government at some level to look in to? Life without a working bank account would seem unreasonably hard to me.

If you cannot manage to get a bank account, then you have problems that the government is not going to be able to fix.

Re: Debit cards are hidden financial infrastructure

#245

Post by capableweb »

simonh wrote: post #243
capableweb wrote: post #227

Earlier quoted context omitted.

It seems to be a common theme that the ones who have been screwed by the banks or are currently being screwed by the banks are cheering for cryptocurrencies, while the ones with no experience of getting fucked themselves keep asking "But what problem does cryptocurrencies really solve? Seems useless to me because banks do the same thing"

If cryptocurrencies were actually being used significantly as currencies, you might have a point. My skepticism of cryptocurrencies has nothing to do with how they replace banks, because they flat out don't replace banks at all. Or rather, the extent to which they do so is trivial. I mean, if they were taking significant business from banks, wouldn't you think the banks would be lobbying to have it banned? But no, in…

The invention of cryptocurrencies (specifically Bitcoin at least) is not to replace banks, but to replace the way transactions happens. A normal bank transfer involves contracts and processes to make sure everyone that handles the transaction is honest. You basically put your trust on contracts that the transaction will actually go through. Bitcoin replaces this need of trust in the contracts with need of trust in the protocol that can be inspected easier than contracts that are most often private, at least that's the thinking.

> wouldn't you think the banks would be lobbying to have it banned?

There are plenty of examples where the banks in a country no longer accepts transactions from/to cryptocurrency exchanges, Sweden being one example where it's basically impossible to deposit/withdraw SEK/EUR to your bank if they think it has anything to do with cryptocurrencies.

In a ideal world, cryptocurrencies are as protected as normal currencies, and the need for banks are still there as not everyone will run their own node and have custody over their own wallet. Banks adds extra security, something some people want.

Problem becomes when you start thinking that one solution applies for everyone. Cryptocurrencies, just like normal currencies, doesn't work for everyone. People should be free to choose, without being banned left and right for arbitrary reasons. Try getting through banks fraud departments when you make transactions from/to countries like Nigeria, and you'll know what I'm talking about.

Re: Debit cards are hidden financial infrastructure

#246

Post by claraem0201 »

numair wrote: post #43

The beginning of this article is a fairy tale that ignores what used to be one of the biggest drivers of revenue for banks: overdraft fees. Maybe the HN crowd has never been in a situation where they were auto-billed into a negative balance, which then caused an overdraft fee that then further drove their balance into negative territory, but this was a weekly/monthly fiasco for millions of Americans. I was once in a…

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Re: Debit cards are hidden financial infrastructure

#247

Post by thrower123 »

bool3max wrote: post #242
thrower123 wrote: post #226

Debit cards prey on poor people, who have been memed into thinking credit cards are dangerous. There is no good reason to use debit over credit in the US if you have the option, but I constantly see advice from people who should know better arguing in favor of debit. If someone steals your credit card and makes fraudulent purchases, your rent and heat and electricity bill checks aren't going to bounce while the bank…

Is that the only argument for credit over debit?

Again, I'm speaking from a purely US perspective, but there is no good reason to use a debit card instead of a credit card, for the same purchasing patterns. You have better fraud protections, you don't worry about overdrafts or transaction reordering, you get a month interest-free loan if you pay back your balance every month. You get cash back or reward points or etc. And if some emergency comes up, you have credit you can call on if you need it.

The argument for debit is basically "I cannot control my spending without a hard limit". Everything about debit is the same as credit cards or worse.

Re: Debit cards are hidden financial infrastructure

#248

Post by numair »

netcan wrote: post #240
numair wrote: post #215

Earlier quoted context omitted.

> Patio11's not doing PR or propoganda. An employee of a multinational financial services company writes a historically revisionist article about an area in which his company has direct regulatory and financial exposure.[1] With only implicit disclosures of conflict of interest. I would say that it is only because of the author’s long-term goodwill in this community that this stuff isn’t looked upon with a very criti…

historically revisionist? I don't see how we can get anywhere discussing like this. Instead of discussing the topic, it's all meta. Ad hominems, characterizations of the argument and accusations of bad faith. As I said, disagree and make your case. You don't have to assume credibility, but don't assume malice. What's the point of having a discussion if it's not a good faith discussion.

> historically revisionist?

Yes. The “big banks lost money servicing the poor people” narrative is totally wrong, and the author knows this. We can’t let this incorrect story get more traction than it already has. Too many innocent people suffered great hardships in the real story of what happened — look at the stories in this thread!

> What's the point of having a discussion if it's not a good faith discussion.

Edward Bernays might have a few ideas.

Re: Debit cards are hidden financial infrastructure

#249

Post by devoutsalsa »

laurent92 wrote: post #185
Foobar8568 wrote: post #165

Earlier quoted context omitted.

In a French bank, I have credit transactions first then debit ones, in a Swiss bank, the contrary, I was shocked, especially that day, I did check my bank account to verify if I could proceed with a wire transfer, the following day, it shown a temporary minus amount but I didn't get an overdraft. So yes, fuck banks.

In Australia in 2010 I got a debit card for the first time in my life. The card would simply reject transactions. “As should be”, I thought. It was a revolution for me.

Revolut, Simple, and Chime, the three online only banks I have tried, all do (or did) this. It really helped back when I was living paycheck to paycheck.

Re: Debit cards are hidden financial infrastructure

#250

Post by kgermino »

jlmorton wrote: post #178
8ytecoder wrote: post #157

Earlier quoted context omitted.

It a uniquely American stupidity that somehow everyone just lives with. The concept of overdraft doesn’t even exist in normal consumer accounts anywhere else in the world. The first thing I do when I open an account here is to disable overdraft - but then you have to pay return cheque charges by whoever was trying to charge your account.

The history is that people used to write paper checks, and merchants would charge a bounced check fee. Overdraft _protection_ was actually a banking feature which would save you from the cost and embarrassment of a bounced check. There is very nearly zero usefulness to overdraft protection in a real-time authorization world. Nobody charges a fee for a rejected debit authorization. I suppose merchants might charge a r…

> nobody uses ACH payments for anything routine in the US.

Water bill, electric bill, mortgage, and property taxes are all ACH for me. Many people pay rent that way. I don’t think it’s commonly used for day to day interactions but a lot of payments are still ACH

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