Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

No one is disrupting banks – at least not the big ones

popularfintech.com

Post reply on HN
Print view View original

421–430 of 452 posts

Re: No one is disrupting banks – at least not the big ones

#421

Post by driuha »

epolanski wrote: post #104
poisonborz wrote: post #63

What do we understand under "banks"? If keeping with the simply notion of "stores funds and provides debit cards", the most common usage in EU, especially east, banks were deeply disrupted. Revolut and Wise took a large segment of the youth, who now also got hooked on more services like savings accounts and stocks. They have startup-like culture while being registered as standard banks. Obviously their services, qual…

I'm a revolut user, but I fail to understand how they plan to make any money off me with all they throw.

They are profitable for a few years now, afaik visa/master pays you a share of their profit each time customer makes a transaction(i.e. share of merchant fee). There are also credits, loans, exchange fees, subscription fees i.e. a lot products that make them money.

Re: No one is disrupting banks – at least not the big ones

#422

Post by vrighter »

kbolino wrote: post #383
bArray wrote: post #305

What does "disruption" look like in the banking space? Banks want the perception of immovable, confidence, reliable, resilience, etc. It's what gives them the credibility to move big money. They don't want to "move fast and break things". Some may think about digital currencies. My warning is this: Be careful what you wish for. If we were to switch to a full digital currency, there are significant concerns that money…

These incentives already exist. The tax code has been manipulated to encourage or discourage behavior since at least WW2. A digital currency makes a lot of these incentives easier to create and easier to enforce, but they wouldn't be new .

an incentive is meant to encourage, not to force.

They are not equivalent. A digital currency turns suggestions into orders.

Re: No one is disrupting banks – at least not the big ones

#423

Post by jgilias »

danielmarkbruce wrote: post #280
jgilias wrote: post #275

Earlier quoted context omitted.

Buying an iPhone on credit is not making money out of thin air. Unless you can fractional-reserve create iPhones.

Sure it is. In fact, it's fractional banking where the fraction is 0. Consider how much business can be done on credit, and what constrains it. Infinite, and nothing. My corner store is not required to hold reserves against it's receivable. Apple (or a telco) is not required to hold reserves against it's receivable for a phone on credit. Their suppliers aren't required to hold reserves against credit on them. And so…

Ok, what am I misunderstanding here?

If I need financing of 100 pesos for buying a house, and I go to a commercial bank which has a 10% fractional reserve requirement, they'll give me 100 pesos, 90 of which will be newly created broad money. As I buy the house, and pay the 100 pesos to the seller, the 90 newly created pesos just entered the economy.

If I go to your corner store and buy an Iphone on credit, you're not getting any new pesos right away, and neither am I. I could turn around, and sell the Iphone to someone, but again, that person will pay me with pesos that already exist in the system.

You could argue that implicitly me wanting to buy an Iphone means that someone somewhere down the line would've used a commercial bank to take a loan and hence my activity indirectly participates in broad money creation. But that doesn't mean that buying an iPhone in a corner store on credit is exactly equivalent to taking out a loan at a commercial bank when it comes to broad money creation.

Re: No one is disrupting banks – at least not the big ones

#424

Post by gosub100 »

Galatians4_16 wrote: post #418
dghlsakjg wrote: post #414

Earlier quoted context omitted.

Sure, but it also prevents poor people without access to a kitchen from having hot food. Do we even know that people reselling hot food would be more of a problem than people reselling cold food? Wouldn't it just be easier to review the transaction data and detect patterns of actual fraud? Is the cost of doing any of this actually lower than the cost of fraud?

Exactly. Poor people are then forced to burn stuff to make heat, which often releases carbon dioxide, unlike clean burning methods using magnetrons.

Forced to? No.

Re: No one is disrupting banks – at least not the big ones

#425

Post by 6510 »

bArray wrote: post #305

What does "disruption" look like in the banking space? Banks want the perception of immovable, confidence, reliable, resilience, etc. It's what gives them the credibility to move big money. They don't want to "move fast and break things". Some may think about digital currencies. My warning is this: Be careful what you wish for. If we were to switch to a full digital currency, there are significant concerns that money…

It might be bad but it isn't self evident. There are several contexts where it would be useful to have. To keep it generic, people can be forced to do all kinds of things. A lot of people cant manage their money. Putting the exact amount in a rent account would be better and cheaper than being put under some kind of supervision.

Rationing everything might seem like a terrible idea right now but the good times might end any moment.

There is also the some what sinister angle where adding new game mechanics to an old rather boring game could make gameplay more interesting.

Favoring a flat playing field would require we ignore how much money some people really have. (and how they got it)

For some reason it is normal for vouchers to expire. We might want you to buy vegetables but if you chose not to you don't have to. There is no need for anyone to grow vegetable rich.

Re: No one is disrupting banks – at least not the big ones

#426

Post by dathinab »

rvba wrote: post #413
dathinab wrote: post #393

Earlier quoted context omitted.

In both the EU and US PayPal is very widely used to pay in online shops. To a point that disabling PayPal temporary can show noticeable decrease in sales for most online shops, especially if international orders are involved. When I sayed "competing with PayPal" I meant for paying online, i.e. alternatives to both PayPal and Credit Cards. Not p2p money sending.

Paypal has no market share in Poland for example. Where you can just sent instant transfers. Also you never replied about paypal not being a real bank, ao it can block money for months. Are you connected to them in any way?

> Also you never replied about paypal not being a real bank,

why should I reply on things which have nothing to do with the discussion?

This never had been about weather PayPal is good or bad or anything, but that it's is very dominant in huge parts of the (western) world _for online shopping_ (not for sending money between people). Something which is a fact weather I like it or not.

> Are you connected to them in any way?

no

through the way you jump from a normal discussion to conspiracy theories is not normal, are you trolling?

Re: No one is disrupting banks – at least not the big ones

#427

Post by StackRanker3000 »

delusional wrote: post #361
bArray wrote: post #305

What does "disruption" look like in the banking space? Banks want the perception of immovable, confidence, reliable, resilience, etc. It's what gives them the credibility to move big money. They don't want to "move fast and break things". Some may think about digital currencies. My warning is this: Be careful what you wish for. If we were to switch to a full digital currency, there are significant concerns that money…

Why would "the government" do that? I hate it when people talk about "the government" doing something. The real mechanics you'd see in your example is that the business elite would begin astroturfing support from the American public, with some nonsense about helping the poor better control their finances. Nobody would believe it, and progressives would be against it. In reality it will be driven by the commercial des…

I don’t really understand your point.

The United States Congress, and the executive branch, they never do anything, to the point where you find it absurd to suggest that they would? Everything is done by the ”business elite”?

Re: No one is disrupting banks – at least not the big ones

#429

Post by danielmarkbruce »

jgilias wrote: post #423
danielmarkbruce wrote: post #280

Earlier quoted context omitted.

Sure it is. In fact, it's fractional banking where the fraction is 0. Consider how much business can be done on credit, and what constrains it. Infinite, and nothing. My corner store is not required to hold reserves against it's receivable. Apple (or a telco) is not required to hold reserves against it's receivable for a phone on credit. Their suppliers aren't required to hold reserves against credit on them. And so…

Ok, what am I misunderstanding here? If I need financing of 100 pesos for buying a house, and I go to a commercial bank which has a 10% fractional reserve requirement, they'll give me 100 pesos, 90 of which will be newly created broad money. As I buy the house, and pay the 100 pesos to the seller, the 90 newly created pesos just entered the economy. If I go to your corner store and buy an Iphone on credit, you're not…

Continue down the chain on your house example. Imagine in each case instead of transferring money in bank accounts, people do the work on credit. Add up all the credit at the end of the chain. Then go back and add up all the bank account balances in the "pay with money transfer". It'll be the same (except for the fraction). Now, go look at a bunch of public company balance sheets - you'll see payables and receivables all the way down from mining companies to retailers. One long chain of credit. They could have all borrowed money from banks instead and have zero trade receivables throughout the entire chain.

The point of "money creation" is to enable economic activity. Credit does the same thing. In fact, your "money" at the bank is just a receivable from the bank. Ray Dalio has a quarter decent explanation of it here: https://youtu.be/PHe0bXAIuk0

Re: No one is disrupting banks – at least not the big ones

#430

Post by dartharva »

ranger207 wrote: post #88

The products being pointed out in this article as an attempt to disrupt banks seem to be basically the same product for a different price. Like, a high-yield savings account is just a savings account with a better price, right? How do you disrupt an industry by selling the same products? The advantage of startups is that they're more nimble, can pivot to fit the market better, and can adapt to customer requests faste…

"Neobanks" in India, although not disruptive, are doing rather well. In general, though, the real disruption Fintech can bring is by working with existing trusted entities, not against them.

I use Fi[1] - it is a service layer on top of an existing savings account from a traditional bank, which offers things like automatic budget/expense tracking with UPI (standardized cashfree payments platform that everybody uses), quick access to debt and equity funds, credit-profiling and networth-tracking, rewards etc. It's pretty good for now at least: https://fi.money/

Post reply on HN