Here's an SDK from Solid Finance you can use to put a bank, bank accounts, customer individuals and organizations, and credit cards (create cards and transact on behalf of your customers) inside your app: https://www.solidfi.com/dev ... complete with KYC and KYB and other regulatory concerns incorporated.
How credit cards make money
71–80 of 445 posts
Re: How credit cards make money
#72Earlier quoted context omitted.
Why not write on Substack? I'd love a comments section for your newsletter.
I welcome comments in my inbox but, having long-ago had them on my blog, do not consider the lack of them a bug.
Which is very reasonable. The SaaS product for comment moderation on a very niche site hasn't arrived yet (afaik. links welcome). Realistically though, you've outsourced the cost of that that work to dang/the team on HN. Which is what I'd do, but I wonder how dang feels about providing that as a service.
Re: How credit cards make money
#73Patrick, how much do you read in a given day (eg. hours?) All those words (and the deep knowledge they reveal) must come from somewhere. And what do you read? Not just twitter I suspect. This article of yours is fascinating: https://bam.kalzumeus.com/archive/financial-innovation-is-ha... Thanks
Varies wildly by the day (and year); probably two hours at the median. I have an advantage in that this sort of thing was a hobby for me for 20 years and then it became very work-relevant the last 5. Someday I'll try to curate a reading list but in the meanwhile the sort of things I read are generally the sort of things I link to in essays/on Twitter/etc. Everything from WSJ to Byrne Hobart's newsletter to Fed resear…
As someone who soaks up information as a sponge, there's a wealth of knowledge to be gained from experts in their field, interactively, and access to Slack at a fintech company provides that in piles. I'm curious, how much time would you say you spend on slack/how do you interact with that?
Re: How credit cards make money
#74I'm happy to answer any questions or take suggestions for future issues if you have them, HN. Repeating something I've said before: this is the 3rd issue of a weekly newsletter, and its going to come out on every Friday for the foreseeable future. As someone who has spent more than 10 years here, I'm keenly sensitive to HN's desire to not have the front page be as predictable as my new shipping cadence. I'd appreciat…
Patrick, as someone with a startup in this space, I just want to say that your content is fantastic. I really appreciated reading this, and was unaware that Japan had a (pricing cartel?) with rewards. Is the market highly concentrated there as it is in the US? If it is indeed an inexplicable coordination situation, has there ever been any antitrust action in this space there?
Due to my quirky position as a foreigner who works in the financial industry in Japan I will not comment on structural sources for observed pricing discipline, but if you're interested in this topic, you may enjoy the Japan Fair Trade Commission's writing on it: https://www.jftc.go.jp/en/pressreleases/yearly-2019/March/Su... It's an active area for them, according to their public statements.
Re: How credit cards make money
#75Earlier quoted context omitted.
One thing that might be fun to cover: I got in a twitter discussion today about why Europeans don't use credit cards as much as people do in the US. Researching this question and related ones ("why are wire transfers free in Europe but not in the US") are basically impossible to Google, as similar but not actually good results ("the cheapest way to wire money to Europe") drown out any primary resources.
> ("why are wire transfers free in Europe but not in the US") this applies only to a subset of Europe or european banks.
Do you want to expand where it isn't the case?
Re: How credit cards make money
#76> Debit cards are a very similar product with enough under-the-hood differences that they deserve their own moment in the sun. In particular, due to a quirk of U.S. interchange regulation, they basically fund most of the fintech industry Basically, the Durbin Amendment caps interchange on debit cards at a far, far lower rate than credit cards; they also have different networks (not MC or Visa) that can be run at leas…
You missed the biggest advantage of credit cards - the limited liability of the card holder to fraudulent charges!
From a financial website…
“ CREDIT CARDS Credit cards offer consumers the widest fraud protection. By Federal law, a cardholder is only liable for the first $50 of an unauthorized transaction at most, with many issuers offering cards with zero liability. DEBIT CARDS Debit card holders are protected under a different law, the Electronic Funds Transfer Act. With debit cards, users' liability is capped at $50 only if they notify the bank within two days of realizing the debit card is missing. Beyond that, they could be responsible for up to $500 of a crook’s spending spree. And waiting more than 60 days to contact the bank could leave a user stuck paying every cent of the unauthorized charges.”
Re: How credit cards make money
#77> Debit cards are a very similar product with enough under-the-hood differences that they deserve their own moment in the sun. In particular, due to a quirk of U.S. interchange regulation, they basically fund most of the fintech industry Basically, the Durbin Amendment caps interchange on debit cards at a far, far lower rate than credit cards; they also have different networks (not MC or Visa) that can be run at leas…
> Credit cards also provide a nice hack to allow cash deposit for those with only online banks...
Thank you, I had no idea about this! Going to seriously help me "deposit" cash since my bank's closest physical presence is two states away...
Re: How credit cards make money
#78Earlier quoted context omitted.
> It is possible, given the design of individual products, that a user with close-to-optimal spending decisions is contribution margin negative on individual products and potentially on all accounts I feel like that user is typically the sort who enjoys telling anyone who will listen about how they managed to get great rewards from their card. With all that free marketing, the credit card issuer is probably happy to…
FWIW: I think technologists are far too quick to jump to "I bet they want to do it for free marketing" and far too slow to think "I bet they have a large team of people who does almost literally nothing other than study this exact question, has thought about it for hundreds of thousands more hours than any credit card user has, and has a highly developed technical infrastructure capable of authoritatively answering i…
Reminds me of:
> The entire fintech sector rules because it’s tech ppl looking at a 500 year old sector that accounts for 10% of the economy and employs some of the smartest and most ruthless people in the world and saying “You know what, I bet these guys are leaving a lot of money on the table” [0]
[0] https://twitter.com/quantian1/status/1447705628521152517
Re: How credit cards make money
#79> Debit cards are a very similar product with enough under-the-hood differences that they deserve their own moment in the sun. In particular, due to a quirk of U.S. interchange regulation, they basically fund most of the fintech industry Basically, the Durbin Amendment caps interchange on debit cards at a far, far lower rate than credit cards; they also have different networks (not MC or Visa) that can be run at leas…
Just a data point about your last paragraph, depositing cash to make payments. My chase atm card does not allow to deposit cash directly to any chase or non chase credit card. I have to put it in chase checking, and then I can use it for payments. Also, capital one, synchrony, amex does not allow me to pay more than 10% of my outstanding balance on their credit cards.
Re: How credit cards make money
#80> Debit cards are a very similar product with enough under-the-hood differences that they deserve their own moment in the sun. In particular, due to a quirk of U.S. interchange regulation, they basically fund most of the fintech industry Basically, the Durbin Amendment caps interchange on debit cards at a far, far lower rate than credit cards; they also have different networks (not MC or Visa) that can be run at leas…
I just have two bank accounts. One I use to pay online, that I put money into myself, and another where I receive my salary. The most anyone can surprise charge me is about 60 EUR, because I don't keep more money in the online purchases account. The upside is that I understand all parts of how this works. I never managed to grok all the details about credit cards and their endless features. I just pay the bank to maintain two accounts with two debit cards, and it costs me the exact same amount every month.