41–50 of 140 posts
Even the first line of illustration is kind of misleading - "Paycheck is deposited into employee's bank account"; there's no such thing as a paycheck in most places worldwide, no checks get involved. The employers pay out the salary with free or cheap bank-to-bank payments, and have done it long enough that the term 'check' has no colloquial relation to your salary. The main difference for accessibility of such payme…
Earlier quoted context omitted.
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.
ACH bank transfers are free in the US too, just takes a few days. Personal transfers with Venmo or paypal are free too in most cases. The fees are for credit cards which make up almost all online transactions and have fees everywhere in the world.
These debit cards very low fees, sometimes they work as both debit and visa card, so you can use them abroad too.
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…
The most they could do is be a fancy wrapper around the bank's own software.
Earlier quoted context omitted.
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.
ACH bank transfers are free in the US too, just takes a few days. Personal transfers with Venmo or paypal are free too in most cases. The fees are for credit cards which make up almost all online transactions and have fees everywhere in the world.
One-day ACH has been standardized and has begun to be rolled out.
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…
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 it.
Eventually interest rates will rise and then bad loans will increase, and tech companies will start to wonder if that's really the business they want to be in (like GE has been "wondering" for many years now).
And then there's the regulatory aspect. Do tech companies really want to be regulated as banks? I get the impression that they have daily run-ins with all sorts of regulators already and they're running scared.
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…
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 presumably Alibaba and Tencent are earning quite a bit off their payments/banking and customers love it because they dont have to carry cash and do all the other steps etc. (talked to Chinese people about it).
Earlier quoted context omitted.
ACH bank transfers are free in the US too, just takes a few days. Personal transfers with Venmo or paypal are free too in most cases. The fees are for credit cards which make up almost all online transactions and have fees everywhere in the world.
Lots of other countries have debit cards linked to accounts with standing credit, instead of the "credit card" that you pay off every month. These debit cards very low fees, sometimes they work as both debit and visa card, so you can use them abroad too.
This is basically Paypal's dream scenario to become a bank because they already deal with the regulatory stuff but don't get the full money earning potential of a bank.