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How Square moves Cash

jonbwhite.tumblr.com

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Re: How Square moves Cash

#31

Post by jes5199 »

djcapelis wrote: post #24
encoderer wrote: post #16

To be fair, it's not some amazing flash of brilliance that led to square realizing you can "refund" a card without a charge first. About 4 years ago I was building a payment processing solution for an ad network (something along the lines of an adsense clone) and for new users we needed to support micro-deposit verification. Usually this involves ACH deposits but to cut down the time it took, I implemented this using…

It's not a flash of brilliance for thinking about it, it's a flash of guts for building a product around it.

Yeah, I second this. When I was at Square (a year ago), we knew the banks' APIs would allow "refunds" of arbitrary amounts, but it was a sort of "gee, isn't that odd" piece of information - it certainly didn't occur to me that it would be reliable enough to replace ACH. I'm super-curious about who made the call to use it this way.

Re: How Square moves Cash

#32

Post by Codhisattva »

jonbwhite wrote: post #3
Codhisattva wrote: post #2

Using the debit card system is not innovative and it's not "cash" either. But don't mind me, I just hate the credit card industry and wish it would roll over and die already.

Point taken, but given ACH as the alternative, I still think this is a step in the right direction.

No way. Feeding the credit card system is feeding children to satan.

Replacing ACH is a much better solution. Like what Dwolla has done.

Re: How Square moves Cash

#33

Post by jes5199 »

bmcleod wrote: post #27
mey wrote: post #13

Earlier quoted context omitted.

The debit networks don't universally allow for refunds, even for legitimate transactions. Additionally it is generally against their terms of use. Either Square is flying under the radar or has gotten special permission to do this.

We've been looking at the payments infrastructure in New Zealand recently and have discovered that, unless you find whoever wrote something 30 years ago, most of the senior payments people have limited and ofter contradictory understanding of the capabilities of the underlying systems.

Definately the US banking systems also still have the feeling that there's been an accretion of layers of technology over ancient systems. APIs that look like XML files wrapping fixed-field-length VAX-style data. It made me wonder - are there still mainframes under there? Or mainframe software being run in emulation? Or are the systems just patchworks maintaining the 1970s interchange formats because no one can stand to making breaking changes?

Re: How Square moves Cash

#34

Post by lsc »

rsync wrote: post #15
atonse wrote: post #14

By the way, Planet Money (a public radio show in the US) had a great episode on how ACH works, and the history behind it. Excerpt from summary: "On today's show: Why the invisible pipes that move money around America are so slow. (And why the ones in England are so much faster.)" http://www.npr.org/blogs/money/2013/10/04/229224964/episode-...

I keep seeing this radio program referenced every time a thread comes up related to (blah blah ACH...). So I listened to it. It wasn't that interesting. If you had never heard of ACH before, it would perhaps be illuminating, but if you already have a decent grasp of the existence of this system and it's shortcomings, there's not a lot more meat in that program... YMMV.

What I find interesting about the program is that I have an emotional reaction like they are talking down to me.

I mean, yeah, it's a podcast targeted at the average person, sure, I'm not expecting them to really go deep. But I don't know very much about that sort of thing, so sometimes they really are giving me information I don't have.

But the tone? Well, it really does feel like I'm being talked down to. I do not know why. I find my own reaction odd, and I've listened to the podcast several times in an effort to try to figure out what, exactly, I found condescending.

It's especially odd because I'll listen to other podcasts targeted at the average person, and I'll be entertained or informed, and I won't feel like they are talking down to me. There's something about the planet money folks that sets me off.

Re: How Square moves Cash

#35

Post by [deleted] »

bmcleod wrote: post #27
mey wrote: post #13

Earlier quoted context omitted.

The debit networks don't universally allow for refunds, even for legitimate transactions. Additionally it is generally against their terms of use. Either Square is flying under the radar or has gotten special permission to do this.

We've been looking at the payments infrastructure in New Zealand recently and have discovered that, unless you find whoever wrote something 30 years ago, most of the senior payments people have limited and ofter contradictory understanding of the capabilities of the underlying systems.

[deleted]

Re: How Square moves Cash

#36

Post by Zoomla »

I always wondered how can ACH be automated and take days to process transactions? Do they use an almost infinite number of monkeys for their automation system?

Re: How Square moves Cash

#37

Post by joezydeco »

lsc wrote: post #34
rsync wrote: post #15

Earlier quoted context omitted.

I keep seeing this radio program referenced every time a thread comes up related to (blah blah ACH...). So I listened to it. It wasn't that interesting. If you had never heard of ACH before, it would perhaps be illuminating, but if you already have a decent grasp of the existence of this system and it's shortcomings, there's not a lot more meat in that program... YMMV.

What I find interesting about the program is that I have an emotional reaction like they are talking down to me. I mean, yeah, it's a podcast targeted at the average person, sure, I'm not expecting them to really go deep. But I don't know very much about that sort of thing, so sometimes they really are giving me information I don't have. But the tone? Well, it really does feel like I'm being talked down to. I do not…

Wow, and this podcast was done by Bloomberg and Kestenbaum, two of their better reporters.

I mean, yeah, it's NPR. You're not going to get amazing voice talent reading the stories. I don't feel talked-down-to as much as I feel like I'm hearing a work done by second-year broadcasting students trying to finish a project. Listen to Chana Joffe-Walt or Zoe Chase sometime.

But if you think this podcast is annoying, best you skip the rest of them...

Re: How Square moves Cash

#39

Post by joezydeco »

rsync wrote: post #15
atonse wrote: post #14

By the way, Planet Money (a public radio show in the US) had a great episode on how ACH works, and the history behind it. Excerpt from summary: "On today's show: Why the invisible pipes that move money around America are so slow. (And why the ones in England are so much faster.)" http://www.npr.org/blogs/money/2013/10/04/229224964/episode-...

I keep seeing this radio program referenced every time a thread comes up related to (blah blah ACH...). So I listened to it. It wasn't that interesting. If you had never heard of ACH before, it would perhaps be illuminating, but if you already have a decent grasp of the existence of this system and it's shortcomings, there's not a lot more meat in that program... YMMV.

Well they have 22 minutes to fill and the situation with ACH is pretty simple. Antiquated system, no motivation to change, done.

Planet Money's original charter was to explain what was happening, literally day-by-day, as the 2007-2008 financial meltdown was happening. And those were pretty informative and well-written shows.

Re: How Square moves Cash

#40

Post by tadfisher »

objclxt wrote: post #7
jonbwhite wrote: post #3

Earlier quoted context omitted.

Point taken, but given ACH as the alternative, I still think this is a step in the right direction.

I think the right direction would be to have a system of inter-bank transfers that was instantaneous, and didn't suck. The banking system in, say, the UK isn't perfect by a long shot, but at least I can move money from one bank account to another (across banks) a) instantaneously, and b) for free. The fact that the US insists on operating on such a terrible system where it takes five business days reflects really bad…

You've described Dwolla's FiSync [1]. And you're right; in every case where the industry has gotten together to make ACH faster or agree on a new standard, the potential impact on wire transfer revenue was cited as the reason not to move forward. Building a new standard from the bottom-up, as Dwolla is trying to do, is nigh impossible when most credit unions and banks actively profit from limiting the liquidity of money.

[1] https://fisync.dwolla.com/

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