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Apple Pay and the rise of the five-party network

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Re: Apple Pay and the rise of the five-party network

#11

Post by samfisher83 »

aianus wrote: post #10
samfisher83 wrote: post #7

Earlier quoted context omitted.

This is probably not a popular opinion. Visa and Mastercards were all owned by the banks that back your credit card. These are highly regulated organizations. I rather not have startups that have sometimes have pretty dubious reputations for skirting the law trying to get into this space. What if someone steals your bitcoin what do you do? Or if you purchase something and you don't get it.

It's cheaper to lose 100% of your purchase 2% of the time than 3% of your purchase 100% of the time. Insurance is for health and houses not my $8 lunch or $500 wallet contents.

You don't think some startup will not take fees? Who is paying for infrastructure and salaries?

Re: Apple Pay and the rise of the five-party network

#12

Post by zepto »

runeks wrote: post #4

A centralized payment system will never be able to provide the best service for users. With a single entity in control -- as opposed to an open system where newcomers can enter and compete with incumbents -- there are no competitors, and competitors are responsible for pushing down fees and adding innovation, thus forcing incumbents to follow along or fade away. That's why the web is so successful: competition is bui…

This seems like an idealistic restatement of the 'open always wins' mantra, with no real logic supported by facts.

The web that you mention is a strong counter example. It is dominated by a few giant corporations, and in many places, increasingly subject to government restrictions.

The web isn't successful because of ideological openness and resistance to control by powerful actors. It's successful because it is extraordinarily useful.

Merchants may see a few percentage points of fee reduction as a potential margin increase for themselves, so 'want' whatever cuts their costs.

Consumers on the other hand want an easy solution that they don't need to worry about.

Apple Pay delivers on the consumer end of this.

A competing solution would need to deliver both to stand a chance.

Re: Apple Pay and the rise of the five-party network

#13

Post by runeks »

samfisher83 wrote: post #7
runeks wrote: post #4

A centralized payment system will never be able to provide the best service for users. With a single entity in control -- as opposed to an open system where newcomers can enter and compete with incumbents -- there are no competitors, and competitors are responsible for pushing down fees and adding innovation, thus forcing incumbents to follow along or fade away. That's why the web is so successful: competition is bui…

This is probably not a popular opinion. Visa and Mastercards were all owned by the banks that back your credit card. These are highly regulated organizations. I rather not have startups that have sometimes have pretty dubious reputations for skirting the law trying to get into this space. What if someone steals your bitcoin what do you do? Or if you purchase something and you don't get it.

> I rather not have startups that have sometimes have pretty dubious reputations for skirting the law trying to get into this space.

Why not? The Stroem protocol, combined with Bitcoin payment channels, is completely trustless from the consumer's perspective. The coins are stored on your phone (or whatever device you want to use for it).

Only merchants need to trust issuers, in exactly the same way that merchants need to trust VISA/Mastercard etc. now. The primary difference is that the system is designed for competition between issuers, instead of a centrally-defined issuer (e.g. VISA or Mastercard).

> What if someone steals your bitcoin what do you do?

If someone steals your bitcoins they're gone. But if you don't trust yourself to keep your bitcoins safe, you're free to deposit them with someone you trust. That's the benefit of Bitcoin: if you feel confident guarding a private key you can store them yourself and, if you don't, you can use an external wallet service -- the best of both worlds.

> Or if you purchase something and you don't get it.

If you find a merchant appears suspicious you should use an escrow service. With the Stroem protocol, adding a layer on top that enables chargebacks via an escrow service is really simple, and completely decentralized. Pick any escrow service you like, who all compete on service/features/price -- no need to always use PayPal/VISA.

Again, the advantage is that you're not forced to pay for something you don't need (chargeback insurance) unless you deem it necessary.

Re: Apple Pay and the rise of the five-party network

#14

Post by runeks »

samfisher83 wrote: post #11
aianus wrote: post #10

Earlier quoted context omitted.

It's cheaper to lose 100% of your purchase 2% of the time than 3% of your purchase 100% of the time. Insurance is for health and houses not my $8 lunch or $500 wallet contents.

You don't think some startup will not take fees? Who is paying for infrastructure and salaries?

There will definitely be fees, but they will be set through competition, as opposed to defined by VISA/Mastercard at will.

Re: Apple Pay and the rise of the five-party network

#15

Post by needusername »

SyneRyder wrote: post #8
needusername wrote: post #6

Earlier quoted context omitted.

> It's a debit push payment What does that mean? > Everyone is issued a green dog virtual card I assume that's just a VISA Debit or VPAY with a special BIN range. Is that correct? Does everybody in the world participating in Apple Pay get a US issued VISA Debit card? > then the entire network works over debit There is no difference at all between VISA credit and VISA debit apart from interchange and when how the issu…

They're good questions, but I think they're answered by the point that Apple Pay Cash is US-only. The service is just Apple's abstraction of Green Dot [1] branded prepaid reloadable VISA cards. If it's US only, Apple doesn't need to worry about the international corner cases yet. There's some more info at Recode [2]: [1] https://www.greendot.com/ [2] https://www.recode.net/2017/6/5/15741636/apple-pay-p2p-venmo...

> Apple Pay Cash is US-only

Thank you, I missed that point. I guess it's understandable given the environment but still I wish Apple would have gone for something more ambitious like the original Apple Pay.

Re: Apple Pay and the rise of the five-party network

#16

Post by samfisher83 »

runeks wrote: post #13
samfisher83 wrote: post #7

Earlier quoted context omitted.

This is probably not a popular opinion. Visa and Mastercards were all owned by the banks that back your credit card. These are highly regulated organizations. I rather not have startups that have sometimes have pretty dubious reputations for skirting the law trying to get into this space. What if someone steals your bitcoin what do you do? Or if you purchase something and you don't get it.

> I rather not have startups that have sometimes have pretty dubious reputations for skirting the law trying to get into this space. Why not? The Stroem protocol, combined with Bitcoin payment channels, is completely trustless from the consumer's perspective. The coins are stored on your phone (or whatever device you want to use for it). Only merchants need to trust issuers, in exactly the same way that merchants nee…

The stuff you describe pretty much sounds like a bank. Instead of a regulated FDIC backed institution you want to store your money at some wallet service which may or may not get hacked in which case you lose your money.

Re: Apple Pay and the rise of the five-party network

#17

Post by runeks »

samfisher83 wrote: post #16
runeks wrote: post #13

Earlier quoted context omitted.

> I rather not have startups that have sometimes have pretty dubious reputations for skirting the law trying to get into this space. Why not? The Stroem protocol, combined with Bitcoin payment channels, is completely trustless from the consumer's perspective. The coins are stored on your phone (or whatever device you want to use for it). Only merchants need to trust issuers, in exactly the same way that merchants nee…

The stuff you describe pretty much sounds like a bank. Instead of a regulated FDIC backed institution you want to store your money at some wallet service which may or may not get hacked in which case you lose your money.

It's very different from a bank, primarily because consumers/payers don't deposit anything, they keep their bitcoins on their device.

Only merchants, who want to receive extremely cheap Bitcoin payments -- the fees are set by the market, but a thousandth of a cent is completely reasonable -- can choose to trust one or more issuers. They may redeem/"cash in" the payments they've received at any time; the more often they do this the less the risk but the higher the fees, but they choose their own risk profile. And if the worst comes to the worst, merchants lose a week/month of income (if they choose to redeem every week/month), the issuers dies, and the merchants will probably survive (assuming the lost income is not fatal to their business). So the bad issuers are flushed very quickly, and merchants can adjust their risk/fee ratio as they desire.

Re: Apple Pay and the rise of the five-party network

#18

Post by needusername »

samfisher83 wrote: post #7
runeks wrote: post #4

A centralized payment system will never be able to provide the best service for users. With a single entity in control -- as opposed to an open system where newcomers can enter and compete with incumbents -- there are no competitors, and competitors are responsible for pushing down fees and adding innovation, thus forcing incumbents to follow along or fade away. That's why the web is so successful: competition is bui…

This is probably not a popular opinion. Visa and Mastercards were all owned by the banks that back your credit card. These are highly regulated organizations. I rather not have startups that have sometimes have pretty dubious reputations for skirting the law trying to get into this space. What if someone steals your bitcoin what do you do? Or if you purchase something and you don't get it.

And they have a chargeback process that works and protects the cardholder. And they won't be gone in five years.

Re: Apple Pay and the rise of the five-party network

#19

Post by aianus »

samfisher83 wrote: post #11
aianus wrote: post #10

Earlier quoted context omitted.

It's cheaper to lose 100% of your purchase 2% of the time than 3% of your purchase 100% of the time. Insurance is for health and houses not my $8 lunch or $500 wallet contents.

You don't think some startup will not take fees? Who is paying for infrastructure and salaries?

The fees can be a lot lower when you don't have to maintain rewards programs, liability for fraud, or dispute mechanisms.

Bitcoin is ridiculously inefficient compared to what a centralized entity could be and it's already cheaper than wire transfers or even credit card transactions over a certain size.

Re: Apple Pay and the rise of the five-party network

#20

Post by saurik »

runeks wrote: post #17
samfisher83 wrote: post #16

Earlier quoted context omitted.

The stuff you describe pretty much sounds like a bank. Instead of a regulated FDIC backed institution you want to store your money at some wallet service which may or may not get hacked in which case you lose your money.

It's very different from a bank, primarily because consumers/payers don't deposit anything, they keep their bitcoins on their device. Only merchants, who want to receive extremely cheap Bitcoin payments -- the fees are set by the market, but a thousandth of a cent is completely reasonable -- can choose to trust one or more issuers. They may redeem/"cash in" the payments they've received at any time; the more often th…

> But if you don't trust yourself to keep your bitcoins safe, you're free to deposit them with someone you trust.

^ This is you, saying that people would deposit things if they fall into the same category of "most people" that don't consider the idea of trying their damndest to just be extremely careful with their cash (which, once stolen, is simply gone, and which can even be misplaced) to be a sane choice in comparison to using... a bank.

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