Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

China Frets: Innovators Stymied Here

online.wsj.com

Post reply on HN
Print view View original

11–20 of 43 posts

Re: China Frets: Innovators Stymied Here

#11

Post by jessedhillon »

thinkcomp wrote: post #10
jessedhillon wrote: post #7

Earlier quoted context omitted.

This is a simplistic view. The law -- which requires payment processors to have some large sum of money, $500k I think, in the bank -- doesn't prevent innovation. There are still plenty of innovators in the payments space. What you don't have is a space frothing with activity and losing the public's money in fly-by-night schemes run by college sophomores. This sort of thing is what the law aims to prevent. It's not a…

Not quite. Yours is a simplistic interpretation of a complex problem. The problem is that the large sum of money is not $500K, which is the amount written in the statute, or $500K "in the bank," which is different from $500K in net assets. It's some other much higher number that isn't in writing and is completely up to a single bureaucrat's discretion. (See http://www.americanbanker.com/issues/176_126/think-computer-…

I also have researched requirements for becoming a licensed money transmitter, while considering starting a payments solution. From looking over your website and your company's topic in Quora, you are clearly more educated in this than I am.

However, from what I know, I believe that you are mischaracterizing the law. Perhaps this is because you feel that you have been victimized by a bureaucratic process. If what you say here and elsewhere is true, I think that it should have been possible to reach a solution that both satisfies the law and allows you to continue doing business.

It's very surprising that, in so many places across the web, you have been unable or unwilling to vocalize the possibility that the law has a legitimate intent. Even the language you use to describe your company's lack of presence in CA is misleading:

The California Money Transmission Act has forced this merchant to stop accepting FaceCash payments. You can still pay with other payment methods.

No. You have decided not to comply with the law because you object to its passing, to the entities you perceive to be backing the law, to its constitutionality, and to its implementation.

As evidenced by the fact that other startups do tackle the payments space, and will in the future, we can conclude that the situation has more to do with you than with the Act.

Re: China Frets: Innovators Stymied Here

#12

Post by hugh3 »

thinkcomp wrote: post #6

This is certainly true, but innovators are stymied in good old California as well. Try tackling a serious problem, such as finance, and you'll find that your innovation breaks a recently passed law. That won't stop someone in Shanghai from copying your work, though. http://www.1jton.com = http://www.facecash.com So who's innovating now?

An iron-clad law of the internet: if you complain about how X sucks in country Y, you'll inevitably just wind up with a thread full of comments about how X sucks in the USA.

Re: China Frets: Innovators Stymied Here

#13

Post by thinkcomp »

jessedhillon wrote: post #11
thinkcomp wrote: post #10

Earlier quoted context omitted.

Not quite. Yours is a simplistic interpretation of a complex problem. The problem is that the large sum of money is not $500K, which is the amount written in the statute, or $500K "in the bank," which is different from $500K in net assets. It's some other much higher number that isn't in writing and is completely up to a single bureaucrat's discretion. (See http://www.americanbanker.com/issues/176_126/think-computer-…

I also have researched requirements for becoming a licensed money transmitter, while considering starting a payments solution. From looking over your website and your company's topic in Quora, you are clearly more educated in this than I am. However, from what I know, I believe that you are mischaracterizing the law. Perhaps this is because you feel that you have been victimized by a bureaucratic process. If what you…

You're right: I do object to the law's passing, to the entities that have been documented to be backing the law (see http://www.leginfo.ca.gov/pub/09-10/bill/asm/ab_2751-2800/ab...; the members of The Money Services Round Table are clarified at http://www.federalreserve.gov/SECRS/2006/August/20060829/R-1...), to its constitutionality, and to its implementation. That doesn't mean that I "have decided not to comply with the law," which is quite a charge to levy.

Just to compare notes, I'd like to see your list of startups that have applied for and are licensed under the California Money Transmission Act. As far as I can tell, based on the DFI's monthly summaries (see http://dfi.ca.gov/publications/summaries/), one startup (Venmo) has applied, and zero startups have licenses to date. This is now ten months after the law went into effect.

As for the law's intent, the statute claims that it's "consumer protection." I doubt anyone who claims that a money transmitter needs $1 million to $80 million of net worth and $750,000 of surety bonds in order to safely transmit $1.

Good luck with your startup. You should do some more research. Right now you sound like an apologist for multi-billion dollar financial corporations.

Re: China Frets: Innovators Stymied Here

#15

Post by lambdasquirrel »

SoftwareMaven wrote: post #14

As someone who is very conflicted about the IP laws in the US, it is interesting how many of the comments focus on the problems no IP protection causes.

Well there's subtle but important differences between patents in general, and patents as they have been abused regarding software.

There's also copyright and trade secrets. Namely, if someone swipes your code here in the US, and you can prove it, it's considered pretty trivial to bring them to court. This apparently not the case in China.

My take on software patents is that they aren't analogous to real-world engineering patents, for, say, a BMW engine. The analogy from BMW engine patents to software is more like copyright on the code itself. Software patents as they are now seem more like business process patents.

Re: China Frets: Innovators Stymied Here

#16

Post by Volpe »

This article doesn't even mention Wang Chuanfu (王传福)?

Owner/Founder of BYD which is a pioneer in battery technology, expanding into cars and electronics, it's is not too disimilar from Apple (in a business sense, different industry).

Re: China Frets: Innovators Stymied Here

#18

Post by Volpe »

briandear wrote: post #9
jessedhillon wrote: post #7

Earlier quoted context omitted.

This is a simplistic view. The law -- which requires payment processors to have some large sum of money, $500k I think, in the bank -- doesn't prevent innovation. There are still plenty of innovators in the payments space. What you don't have is a space frothing with activity and losing the public's money in fly-by-night schemes run by college sophomores. This sort of thing is what the law aims to prevent. It's not a…

You're completely correct. Just getting a business license in China takes a bribe and months of red stamping. Innovation is crushed in China mainly because of the IP laws (or ignoring thereof.)

> Just getting a business license in China takes a bribe and months of red stamping.

Do you have any evidence of this? From my time in china, I see a massive entrepreneur spirit. In fact everyone I spoke to was starting a business of some kind.

What colour stamps do you use in the U.S? Are they somehow superior to red ones?

> Innovation is crushed in China mainly because of the IP laws (or ignoring thereof.)

Any evidence of that as well? I would 'guess' that it is more related to the fact that there is so much low hanging fruit in the chinese economy right now, that innovation just isn't required to run a successful business.

Re: China Frets: Innovators Stymied Here

#19

Post by hahaonlysirius »

thinkcomp wrote: post #13
jessedhillon wrote: post #11

Earlier quoted context omitted.

I also have researched requirements for becoming a licensed money transmitter, while considering starting a payments solution. From looking over your website and your company's topic in Quora, you are clearly more educated in this than I am. However, from what I know, I believe that you are mischaracterizing the law. Perhaps this is because you feel that you have been victimized by a bureaucratic process. If what you…

You're right: I do object to the law's passing, to the entities that have been documented to be backing the law (see http://www.leginfo.ca.gov/pub/09-10/bill/asm/ab_2751-2800/ab... ; the members of The Money Services Round Table are clarified at http://www.federalreserve.gov/SECRS/2006/August/20060829/R-1... ), to its constitutionality, and to its implementation. That doesn't mean that I "have decided not to comply w…

Let's be clear: the multi-billion dollar financial corporations didn't shut you down. The state did. They're the ones with the guns.
Post reply on HN