31–40 of 140 posts
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.
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 Apple / Google Pay and I'm sure it has consumer banks shaking in their boots, because there's no way they can outcompete those companies in tech. So instead they focus on regulatory capture and making it as difficult as possible for tech companies to play in their sandbox without banker supervision.
One only needs to look at the adoption rate of Apple Pay outside the US to see this system at work. In parts of Europe and the UK it's extremely popular because the banking systems have much friendlier regulations and fewer integration points. In the US the uptake has been slow because the integration is so cumbersome and the banks / payment networks control the entire cycle from point-of-sale to deposit.
Regulation in the US makes it harder for this to happen but 3 stepping stones will let the tide turn and Amazon is very close to crossing them. 1. Money transmission regulations require at least $2 million in reserves and 2 years to get a license to transmit money in all 50 states. 2. Knowing the credit and identity of your customers is critical in preventing fraud, illegal transactions, and other issues which cost h…
As for the delay, a common practice to enter a new market in finance is to "just" buy an existing bank that has all the required permits and all the legal and technical connections to the settlement infrastructure. There are thousands of banks, many of them small and relatively affordable for any investor trying to make a serious entry into the market. E.g. if some foreign financial company would want to start business in a new market, they usually would not start from scratch and bother with the licensing delays but buy some existing institution to absorb, rebrand and grow. If Amazon or Google or a new VC-backed company would want to enter the market, they're likely to do the same. If Amazon can spend a dozen billion on WholeFoods, then spending ten or fifty million on a small bank to get a banking operation running much faster is just natural, and not even a waste of money, as they'd likely need tens of millions of capital reserves anyway to justify holding immense amounts of customer money.
The banks have been pushing for a cashless society for awhile now. So once they achieve their goal of preventing me from paying someone else $10 without a 3rd party getting a 2-3% fee for the privilege of exchanging money between two private parties, it won't be them getting the 2-3%? Cry me a river.
Hmm, most other countries have free transfers between bank accounts. It's just the US (maybe a few others) still stuck in the stone age.
Earlier quoted context omitted.
paypal isn't a bank, though.
GP mentioned: >free transfers between bank accounts does it really matter if it was done through some third party service?
- 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 without credentials banks work under is totally flawed and wont last much longer.
The banks have been pushing for a cashless society for awhile now. So once they achieve their goal of preventing me from paying someone else $10 without a 3rd party getting a 2-3% fee for the privilege of exchanging money between two private parties, it won't be them getting the 2-3%? Cry me a river.
>The banks have been pushing for a cashless society for awhile now. Since the first loan was regulated banks have been pushing for a cashless society. Your comment is very much an understatement. It is the holy grail of the financial industry. Because of the liquidity ratio. Banks are supposed to have 10% of their total lending in cash. This is to prevent a run on the bank. No cash means banks can lend an infinite am…
that's not how fractional reserve works. banks have capital requirements (some of which may be cash), not cash requirements. moreover, even if it was somehow cash requirements, they're not obligated to hold physical cash.
This has been like this for at least 2 years over there now. This is facebook/whatsapp best's and only strategy to stop living off consumer data and start living off an actual service industry. Very poor management decision from my perspective, perhaps they had trouble gathering political support.
> stop living off consumer data and start living off an actual service industry. the apps in china boomed due to the fact that credit cards weren't popular nor available at the time, and the opportunity for the app (wechat) to become the payment method presented itself. This can't happen in the western world, because credit cards are so ubiquitous, and displacing it is high neigh impossible.
Also those payment apps are like PayPal in the sense it provides very little fraud detection and protection. You are petty much on your own. They process almost no chargebacks, for example.
The Chinese consumers have vastly different expectations when it comes to money because the lack of protection throughout history. To them, it looks very unsafe to just swipe a card without a PIN, and chargeback is an alien concept.
Earlier quoted context omitted.
also, credit cards have consumer protection by law in cases of fraud, "wallet" type services like alipay? not so much.
While there is no guarantee by law, these companies do cover fraud with their vast reserves. Ofcourse an economic downturn could change that.