Nasty Truths About U.S. Fintech

#1

Post by rumayor » Thu, Jul 30, 2015, 1:01 AM UTC

Nasty Truths About U.S. Fintech
venturebeat.com

Re: Nasty Truths About U.S. Fintech

#2

Post by hermanmerman » Thu, Jul 30, 2015, 1:40 AM UTC

If you haven't seen it already (was posted yesterday I think), check out Standard Treasury's Series A deck: http://slideshare.net/linhir/standard-treasury-series-a-pitc...

They explain why they decided to start their bank in the UK instead of the US. For once, the USA seem to have no competitive advantage.

Re: Nasty Truths About U.S. Fintech

#3

Post by mikeyouse » Thu, Jul 30, 2015, 3:43 AM UTC

hermanmerman wrote: post #2

If you haven't seen it already (was posted yesterday I think), check out Standard Treasury's Series A deck: http://slideshare.net/linhir/standard-treasury-series-a-pitc... They explain why they decided to start their bank in the UK instead of the US. For once, the USA seem to have no competitive advantage.

> For once, the USA seem to have no competitive advantage.

For some businesses maybe, but given that in the past week or so, Square filed to IPO and Stripe raised several more tens of millions, it seems there's plenty of 'gravity' here too.

Re: Nasty Truths About U.S. Fintech

#4

Post by deet » Thu, Jul 30, 2015, 4:27 AM UTC

The title should be "4 nasty truths about becoming a money transmitter in the U.S." ... FinTech is much larger than just payments and transmission.

Re: Nasty Truths About U.S. Fintech

#5

Post by scurvy » Thu, Jul 30, 2015, 4:33 AM UTC

I'm OK with all of the fees as long as they go towards enforcement and regulation. If they exist just to increase the price of entry, then they need to be lowered. 2008 was a great reminder of how a lack of oversight and enforcement can cause huge problems for everyone. I hope we have not already forgot that.

Re: Nasty Truths About U.S. Fintech

#6

Post by hkmurakami » Thu, Jul 30, 2015, 4:39 AM UTC

That's something that I noticed when looking through Standard Treasury's Series A deck yesterday [1]. Their cost allocation for "Regulatory work" will cost almost $3mm over the next 2 years, pre-lauch.

And it looks like they're going to become a bank in the UK rather than in the US. It must have been even more costly to do the work in the US for them.

[1] http://www.slideshare.net/linhir/standard-treasury-series-a-...

Screenshot of slide: http://gyazo.com/f2a23c97e1ef652ddbe6cdb5fadbf737

Re: Nasty Truths About U.S. Fintech

#7

Post by adventured » Thu, Jul 30, 2015, 4:43 AM UTC

hermanmerman wrote: post #2

If you haven't seen it already (was posted yesterday I think), check out Standard Treasury's Series A deck: http://slideshare.net/linhir/standard-treasury-series-a-pitc... They explain why they decided to start their bank in the UK instead of the US. For once, the USA seem to have no competitive advantage.

The global reserve currency will always act as a dramatic inherent advantage; it acts as a massive force of gravity. As will having the world's largest economy, the largest government, the largest bond and debt markets, the largest tax base, ~40% of all global private wealth, the largest real estate market, and by far the largest stock market. It also has by far the best business / financial news, and financial information systems. Add all of that together, under one integrated market, and the US will continue to have remarkable advantages in fintech.

Re: Nasty Truths About U.S. Fintech

#8

Post by nickff » Thu, Jul 30, 2015, 4:47 AM UTC

scurvy wrote: post #5

I'm OK with all of the fees as long as they go towards enforcement and regulation. If they exist just to increase the price of entry, then they need to be lowered. 2008 was a great reminder of how a lack of oversight and enforcement can cause huge problems for everyone. I hope we have not already forgot that.

Many of us remain unconvinced of the notion that a "lack of oversight and enforcement" caused the great recession.[1][2][3][4]

[1] http://mercatus.org/sites/default/files/GrowthofFinancialReg...

[2] http://dailysignal.com/wp-content/uploads/BL-SEC-budget-char...

[3] http://media.economist.com/sites/default/files/imagecache/29...

[4] http://www.yalelawjournal.org/mht_files/98/SteinwayforWebsit...

Re: Nasty Truths About U.S. Fintech

#9

Post by toehead2000 » Thu, Jul 30, 2015, 4:49 AM UTC

adventured wrote: post #7

hermanmerman wrote: post #2

If you haven't seen it already (was posted yesterday I think), check out Standard Treasury's Series A deck: http://slideshare.net/linhir/standard-treasury-series-a-pitc... They explain why they decided to start their bank in the UK instead of the US. For once, the USA seem to have no competitive advantage.

The global reserve currency will always act as a dramatic inherent advantage; it acts as a massive force of gravity. As will having the world's largest economy, the largest government, the largest bond and debt markets, the largest tax base, ~40% of all global private wealth, the largest real estate market, and by far the largest stock market. It also has by far the best business / financial news, and financial infor…

And the most majestic eagles.

Re: Nasty Truths About U.S. Fintech

#10

Post by rayiner » Thu, Jul 30, 2015, 4:50 AM UTC

It's not really a fair comparison is it? The U.S. is 50 semi-independent sovereigns covering 315 million people. What's the cost of registering to become a money transmitter in all the Eurozone countries (which have a similar aggregate population)?