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Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

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Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#221

Post by CyanLite4 »

Nextgrid wrote: post #187
lifeisstillgood wrote: post #165

Earlier quoted context omitted.

Can I understand this flow? I want to buy a CD from Amazon for 19.99. I click on my bank application (or maybe some QR code on Amazons site) And that tells my bank app on my phone to authenticate my phone agains the bank And ask for a 16 digit number that is solely for amazon, 19.99 and 20240812

Think standard oAuth. Github has multiple flows that should cover most purposes here: https://docs.github.com/en/apps/oauth-apps/building-oauth-ap... . The key is that payment data is encoded in oAuth-like scopes, so all authorizations are scoped by amount and lifetime, and are implicitly merchant-specific. Browser-based flow, where you're already logged into the bank in an existing browser tab: * Amazon redirects yo…

This is no different than chip+pin for physical purchases. There are still other major areas of fraud that has to be addressed.

It doesn’t cover credit risk-even on a debit card, there can be a “hold” period of an arbitrary amount before the final transaction clears. When you swipe a card at a gas station, they often run a $50 authorization hold on your account.

It also doesn’t cover merchant fraud—- Visa/MC covers you if the merchant doesn’t ship the product because they’re a fake company.

Then there are value-added warranty services that higher end cards offer. These are easily worth the 1%+ fee.

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#223

Post by null0pointer »

leobg wrote: post #164

Just imagine how different the Internet would look like today if receiving payments would’ve been as easy as receiving email from the beginning. That it is not trivial for a single person on the Internet to receive payments without a third-party involved, in my mind, leads directly to an Internet that is based on ads and on monopolies: You can’t make a living posting stuff online on your own private website. Because…

This use case is the entire point of cryptocurrencies. It’s just a shame that there wasn’t more effort spent on improving the UX rather than running the VC playbook on the ecosystem to seize control over it.

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#224

Post by Yeul »

fuzzer371 wrote: post #129
thesausageking wrote: post #39

Earlier quoted context omitted.

The challenger to these will solve for a different problem. Not every transaction needs complex fraud detection or being able for the customer do to chargebacks. For a 3% discount, would customers agree to use something that worked just like cash, where the transfer was instant and couldn't be undone? Then you don't have to worry about fraud, chargebacks, etc.

This has been done with Zelle and people are crying because they're dumb enough to fall victim to obvious scams.

The idea of buying stuff from a dodgy website just seems strange to me.

One of the most fundamental basics of trading has always been trust.

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#225

Post by codexon »

fragmede wrote: post #26

look up Red ocean vs blue ocean. Even if it was, there are better uses for a "decade with enough funding" unless you have some competitive advantage, like you're the CEO of Chase Bank or something. If you want to know how possible it is, consider that Bitcoin was released in 2009 and cryptocurrency's success at being used for payments - in the history of the world - it has been used for payments between people for so…

Bitcoin is way behind visa because it sucks as a payment system. Have you ever tried buying something in bitcoin?

The fees are insane and nearly all merchants require multiple confirmations which can take over an hour.

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#227

Post by treflop »

Nextgrid wrote: post #187
lifeisstillgood wrote: post #165

Earlier quoted context omitted.

Can I understand this flow? I want to buy a CD from Amazon for 19.99. I click on my bank application (or maybe some QR code on Amazons site) And that tells my bank app on my phone to authenticate my phone agains the bank And ask for a 16 digit number that is solely for amazon, 19.99 and 20240812

Think standard oAuth. Github has multiple flows that should cover most purposes here: https://docs.github.com/en/apps/oauth-apps/building-oauth-ap... . The key is that payment data is encoded in oAuth-like scopes, so all authorizations are scoped by amount and lifetime, and are implicitly merchant-specific. Browser-based flow, where you're already logged into the bank in an existing browser tab: * Amazon redirects yo…

This is a technical solution to a non-technical problem.

My risk to my credit number being stolen is honestly low. The risk is the merchant providing a substandard service 99% of the time, and an OAuth style payment flow does nothing for that.

Someone like Amazon who is a trusted merchant already negotiates fees with their banks and they likely already have an extremely low fee rate.

What Stripe, Square and PayPal provide is a service for integrators who don’t want to spend money talking to a bank, negotiating a rate, and then implementing the required security to execute their own transactions.

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#228

Post by egypturnash »

hugs wrote: post #172
Nextgrid wrote: post #120

Earlier quoted context omitted.

A lot of the fraud hinges on the fact that all you need to drain an account is a static card number. A lot of hacks are subsequently piled on top of that to try and make it harder (SCA/3D Secure, captchas, etc), and a lot of busywork is spent tidying up the consequences of that (chargeback handling, etc). You could eliminate a lot of the fraud by moving off a mostly-static identifier to merchant, amount and time-limi…

> You could eliminate a lot of the fraud by moving off a mostly-static identifier to merchant, amount and time-limited tokens the user generates with their bank (or the merchant redirects them there). This would address a lot of the issues - the tokens are useless when leaked... This almost sounds like a subtle recommendation for the Lightning Network. It's based on single-use invoices that are locked to a specific r…

There's a lot of interesting ideas around cryptocurrency but they all kind of have the problem that they're associated with cryptocurrency, which is now strongly associated with absurdly high transaction fees, get-rich-quick scams, and wasting colossal amounts of energy for a pathetically-low transaction throughput.

Good luck convincing J. Random User that your cryptocurrency is none of these things.

Re: Ask HN: Do we need to pay billions in fees to Stripe, Block, PayPal and Visa/MC?

#230

Post by treflop »

oldprogrammer2 wrote: post #9

Stripe, Block, and PayPal each solved a massive pain point. PayPal provided a way to pay people and vendors without giving away your credit card number. Square made it easy to accept payment in person on a phone, without an extensive upfront underwriting experience and without expensive fixed monthly fees. Stripe did the same as Square, but for accepting online payments. Fraud and Risk come in many forms, and these p…

Stripe, Block, and PayPal were never required to process transactions.

You can negotiate with a bank to get your own rate and then implement your own secure transaction processing. Visa is still required though.

I have worked at companies that bypassed those middlemen. Many companies don’t do it because they are okay with paying higher fees so they don’t have to deal with that extra headache, or because they work at smaller companies that think Stripe, Block, and PayPal invented payment processing when Visa and banks have been around for decades longer.

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