Debit cards are hidden financial infrastructure • Hacker News Board

Re: Debit cards are hidden financial infrastructure

#331

Post by pessimizer » Sat, Nov 13, 2021, 5:54 PM UTC

pinkfairy10 wrote: post #307

roystonvassey wrote: post #292

Earlier quoted context omitted.

Long back when I worked in my first job at a large private bank, I remember being in a meeting where they spoke about overdraft fees + late fees + interest on these + god knows what else and the lady, our systems counterpart, looked at all of us and said 'We better plan a trip to Ganges to atone for all this and we might need to go ever year' (it's a common saying in India, as Ganges is supposed to wash away one's si…

Your comment seems false given private banks commonly don’t charge overdraft fees, or late fees, or interest charges.

Your comment seems ill-informed.

Re: Debit cards are hidden financial infrastructure

#332

Post by xook » Sat, Nov 13, 2021, 5:55 PM UTC

pinkfairy10 wrote: post #307

roystonvassey wrote: post #292

Earlier quoted context omitted.

Long back when I worked in my first job at a large private bank, I remember being in a meeting where they spoke about overdraft fees + late fees + interest on these + god knows what else and the lady, our systems counterpart, looked at all of us and said 'We better plan a trip to Ganges to atone for all this and we might need to go ever year' (it's a common saying in India, as Ganges is supposed to wash away one's si…

Your comment seems false given private banks commonly don’t charge overdraft fees, or late fees, or interest charges.

What would classify as a private bank? IME, you're given the option for overdrafts regardless.

Re: Debit cards are hidden financial infrastructure

#333

Post by leetcrew » Sat, Nov 13, 2021, 5:57 PM UTC

philjohn wrote: post #326

cameronh90 wrote: post #231

Earlier quoted context omitted.

UK banks are pretty heavily regulated. For example, the overdraft fee spiral has been banned and in many cases banks were required to pay compensation. Yet we have quite a lot of banks to pick from - around 60 if you include building societies (more if you include private, niche and specialist banks). We also have a fair few new and digital challenger banks like Monzo, Starling, Atom, Revolut and arguably Metro Bank.…

There are a lot of things that are just plain better in the UK compared to the US. Out of network ATM fees being a big one. See also regulation about what the incumbent last-mile network provider (Openreach) can charge ISP's to provide services on their lines which has led to a larger number of ISP's available in any one place (unless you're in Hull, because of historical reasons).

if ATM fees are important to you, you could always consider opening an account with schwab. they reimburse 100% of ATM fees.

as for ISPs, it's hard to do worse than comcast, but at least they don't block a wide range of content by default.

https://en.wikipedia.org/wiki/Web_blocking_in_the_United_Kin...

Re: Debit cards are hidden financial infrastructure

#334

Post by raydev » Sat, Nov 13, 2021, 6:03 PM UTC

pessimizer wrote: post #330

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…

Even worse, they batch transactions by the day, and reorder them highest debit first in order to maximize overdraft fees. So if you spend $5, $5, $5, and $40, in that order, with $38 in the bank, instead of getting one $35 overdraft fee, you get 4. It's the difference between a balance of -$52 and a balance of -$157. I once worked at a bank where they had for a period doublecharged people for overdrafts, driving them…

I got hit by this two separate times in the early 2000s before I learned it was better to withdraw whatever cash I had left. I was already stuggling, living out of my car, and having additional overdraft fees on top of the one I expected was devastating. It literally left me unable to buy food for days, because each overdraft fee was $20 IIRC.

I'm shocked that the transaction reordering is still a practice nearly 20 years later.

Re: Debit cards are hidden financial infrastructure

#335

Post by jedimastert » Sat, Nov 13, 2021, 6:24 PM UTC

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…

> Maybe the HN crowd has never been in a situation where they were auto-billed into a negative balance

I wonder about this some times. It's truly not something I wish upon anyone, but at the same time it's almost a privilege to have live it first hand, as it's an...I was gonna say "unfortunately rare" but I think I'll go with "severely under-represented" point of view in this industry, especially silicone valley.

Also yes, overdraft fees are truly disgusting. What's worse is that there are transactions that can bypass "overdraft protection"

Re: Debit cards are hidden financial infrastructure

#336

Post by pbourke » Sat, Nov 13, 2021, 6:27 PM UTC

Ozzie_osman wrote: post #283

mherdeg wrote: post #56

Earlier quoted context omitted.

It's not just overdraft fees right? It's overdraft fees plus transaction reordering which makes the magic happen. I'm still kind of mesmerized on this one, it felt like regulatory action almost happened, the most lucrative of the overdraft practices got limited circa 2009/2010, and then banks voluntarily toned it down and the regulators mostly looked the other way on things like reordering?

Yea. For people who aren't familiar with this, the bank will reorder your transactions and batch them to do the biggest one first. Then you get charged an overdraft fee per transaction after that. If they did the small ones first, you may not go into overdraft until the last big one... So you'd pay one fee. Do the largest first, then each small one causes a fee. Highway robbery.

The argument, which I do not buy as sufficient but add here for completeness, is that it’s better for your large purchases (ie rent) to clear before your $10 lunch, etc.

Re: Debit cards are hidden financial infrastructure

#337

Post by simonbarker87 » Sat, Nov 13, 2021, 6:29 PM UTC

spir wrote: post #324

simonbarker87 wrote: post #203

Earlier quoted context omitted.

Lower transaction fees? I moved a few hundred £ into my wallet the other day for some Ethereum and paid like £50 in various fees and gas. The crypto world is full of layers of middle men taking their slice. Even swapping some ENS to ETH cost over $100 in gas

You're right that ethereum's fees are extremely high, and they will only get much higher. That's because, heading into the future, ethereum isn't intended for direct use by end-users. End-users may expect to use ethereum's live & emerging scaling solutions, also known as Layer-2 networks or L2s. The ethereum chain itself has become known as the "base layer" or, more commonly, "the L1". Only rollups, governments, mega…

Thanks for the explanation, very useful

Re: Debit cards are hidden financial infrastructure

#338

Post by spir » Sat, Nov 13, 2021, 6:42 PM UTC

simonbarker87 wrote: post #337

spir wrote: post #324

Earlier quoted context omitted.

You're right that ethereum's fees are extremely high, and they will only get much higher. That's because, heading into the future, ethereum isn't intended for direct use by end-users. End-users may expect to use ethereum's live & emerging scaling solutions, also known as Layer-2 networks or L2s. The ethereum chain itself has become known as the "base layer" or, more commonly, "the L1". Only rollups, governments, mega…

Thanks for the explanation, very useful

You're most welcome! I'd be happy to discuss this with anybody interested. The best way to reach me is via twitter DM https://twitter.com/ryanberckmans

Re: Debit cards are hidden financial infrastructure

#339

Post by latchkey » Sat, Nov 13, 2021, 6:45 PM UTC

coconut_crab wrote: post #195

latchkey wrote: post #77

In Vietnam, even the 'credit cards' are 'debt cards'. There is no concept of a credit score there (or a legal way to really make people pay up a debt), so they came up with this work around. To get a credit card, you have to carry the total amount of 'credit' as a time deposit in your account that you can't touch.

It's not entirely true. Some banks only issue credit cards if you receive salary via their bank account or have a deposit there (mostly state owned banks) but other have no such requirement. Also they already have a credit score database up and running (CIC).

Name one bank in Vietnam that has no such requirement.

The credit score database only applies to locals and not foreigners living there, so that is what my reference was.

Re: Debit cards are hidden financial infrastructure

#340

Post by mdp2021 » Sat, Nov 13, 2021, 6:55 PM UTC

organsnyder wrote: post #327

mdp2021 wrote: post #198

Earlier quoted context omitted.

Should not that cause legal action - duly and factually?

Only if it's illegal.

It's a scheme with the purpose of theft.

You cannot have law as a list of specific cases: it must be based on patterns - "All arbitrary appropriation is forbidden and sanctioned", then further made into distinct categories to substantiate and differentiate the amount of gravity. All theft is illegitimate.