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China’s Payment Apps Give U.S. Bankers Nightmares

bloomberg.com

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Re: China’s Payment Apps Give U.S. Bankers Nightmares

#101

Post by TACIXAT »

drb91 wrote: post #10

Is there any evidence these chat based payment apps (venmo, apple pay, facebook messenger, snapchat...?) are replacing credit card transactions in the US? They seem to replace person to person cash transactions instead.

Venmo takes a loss just to get people into the PayPal ecosystem. The other P2P options are just there in hopes they take off. My understanding of Apple pay was that it's just a pass through for credit card transactions.

Those P2P apps need to branch into physical retail.

Re: China’s Payment Apps Give U.S. Bankers Nightmares

#103

Post by westiseast »

raverbashing wrote: post #97
fzzzy wrote: post #89

Earlier quoted context omitted.

Huh? Apple Pay uses the exact same NFC tech as contactless.

Why would I want to pull my phone, unlock it, if I can just tap my card instead?

The beauty of China-style massive adoption of mobile payments is leaving the house without taking your cards or wallet or cash with you.

So kind of agreeing with you - Apple Pay is great because then I don’t need to take my card (whereas I’ll always take my phone) and it has added security of Face Recognition.

However, the poor adoption (ie, all those places that don’t have contactless, don’t take cards, money transfers to friends, parking meters....). Contactless vs ApplePay is 50:50.

Re: China’s Payment Apps Give U.S. Bankers Nightmares

#104

Post by westiseast »

fauigerzigerk wrote: post #46
chatmasta wrote: post #32

The critical difference is that in China, the apps effectively are the banks, whereas in the US, regulatory capture ensures that the banks stay the banks and it's the app's problem to figure out how to interface with them. The reason the banks are scared is not because "banks" are not involved. They're scared because these apps have successfully vertically integrated to become banks. This is the logical next step for…

>They're scared because these apps have successfully vertically integrated to become banks. I'm not sure tech companies really want the core banking business, which is to lend money (taking on credit risk in the process) funded by deposits. I can imagine Amazon doing it for smaller consumer purchases as they know their customers well. But who will make loans to SMEs and larger retail loans? Google and Apple? I doubt…

FYI Alibaba/Alipay has a range of loan and financial products. My wife’s Taobao business does well, and so she’s eligible for huge, insane loans on Alipay. On the other side, micro-loans to fund consumer purchases are also available.

Re: China’s Payment Apps Give U.S. Bankers Nightmares

#105

Post by pishpash »

commandlinefan wrote: post #47
chatmasta wrote: post #32

The critical difference is that in China, the apps effectively are the banks, whereas in the US, regulatory capture ensures that the banks stay the banks and it's the app's problem to figure out how to interface with them. The reason the banks are scared is not because "banks" are not involved. They're scared because these apps have successfully vertically integrated to become banks. This is the logical next step for…

It makes sense. We're seeing more and more "middle men" being removed from the economy (travel agents, publishers, broadcasters, retailers); banks are about as pure "middle men" as you can imagine. Whether this is good or bad isn't as relevant as whether or not it's inevitable and, long term, I think it is.

Everybody is a middleman when the robots take over, so yes.

Re: China’s Payment Apps Give U.S. Bankers Nightmares

#106

Post by pishpash »

TACIXAT wrote: post #99

I applied to YC to bring this idea to the US (rejected). Credit cards are our primary form of digital money and their fees are excessive. The basic design was ACH money into the wallet, transfer money between balances for ultra low cost (1%), ACH money out of the wallet. The difficulties are regulation. Doing this would make you a money service business and banks really don't want to touch that. Plus it costs a nice…

The claim is that the fees primarily cover fraud and fund various consumer protections. It would be interesting to know how much of the 3% that actually is.

Re: China’s Payment Apps Give U.S. Bankers Nightmares

#107

Post by westiseast »

fauigerzigerk wrote: post #46
chatmasta wrote: post #32

The critical difference is that in China, the apps effectively are the banks, whereas in the US, regulatory capture ensures that the banks stay the banks and it's the app's problem to figure out how to interface with them. The reason the banks are scared is not because "banks" are not involved. They're scared because these apps have successfully vertically integrated to become banks. This is the logical next step for…

>They're scared because these apps have successfully vertically integrated to become banks. I'm not sure tech companies really want the core banking business, which is to lend money (taking on credit risk in the process) funded by deposits. I can imagine Amazon doing it for smaller consumer purchases as they know their customers well. But who will make loans to SMEs and larger retail loans? Google and Apple? I doubt…

Also, aside from traditional lending, Alipay and Wechat are both competing to basically own all social and consumption data - in a sense I’d agree they don’t want to become traditional banks: they want to create closed payment/purchasing/social systems where they can take cuts from every step of the process.

Re: China’s Payment Apps Give U.S. Bankers Nightmares

#108

Post by pishpash »

frockington wrote: post #80
JTbane wrote: post #65

Earlier quoted context omitted.

It still vexes me that I can't instantly transfer money from my bank to a friend's account without paying, or using a third-party like Venmo or Paypal.

Most banks are using Zelle now, all but instant in my experience

Zelle is restrictive, daily limits are quite low. It's also not always instant, depends on how much risk your bank considers you.

Re: China’s Payment Apps Give U.S. Bankers Nightmares

#109

Post by pishpash »

solotronics wrote: post #37

there are a couple important things to consider here - who is liable or who will make it right when your money is stolen? - retail banking in the US sucks in every way except that they will reimburse you for fraud if it was up to me all my payments would only happen on a cryptocurrency layer and all my cash storage would happen in an account you could only withdraw from in person to the crypto account. the pull model…

They will reimburse you for fraud, after fraud already happens. It would be much better if they worked proactively to prevent fraud. Then they'd be offering a service for a fee, rather than, essentially, selling insurance.

Re: China’s Payment Apps Give U.S. Bankers Nightmares

#110

Post by pishpash »

gruez wrote: post #15
the_watcher wrote: post #11

As long as banks get the FDIC guarantee while American WeChat-type competitors don't, they'll be fine.

also, credit cards have consumer protection by law in cases of fraud, "wallet" type services like alipay? not so much.

Most purchases on those platforms are for consumables, food, event tickets, etc.
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