China’s Payment Apps Give U.S. Bankers Nightmares • Hacker News Board

Re: China’s Payment Apps Give U.S. Bankers Nightmares

#81

Post by jjoonathan » Wed, May 23, 2018, 7:31 PM UTC

jopsen wrote: post #43

dkasper wrote: post #35

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.

Who gets the seller fees?

In the US, you only get a piece of the action if you use a credit card. Otherwise you still pay the higher, transaction-fee-included price, but you don't get any part of the transaction fee.

Re: China’s Payment Apps Give U.S. Bankers Nightmares

#82

Post by s73v3r_ » Wed, May 23, 2018, 7:36 PM UTC

abakker wrote: post #61

s73v3r_ wrote: post #57

Earlier quoted context omitted.

"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." Are you sure it's that? Or is it that the apps don't want to have the responsibility of safeguarding people's money? Cause really, payments and money are things where you really do not want to "m…

This all depends whether you can shift the risk. It is fine to break things if you have managed to get insurance to cover the downside.

I would phrase that another way. It's fine to break things if you can make whole the people who are negatively affected by breaking things. Someone getting their money returned after it was stolen from your startup bank is one thing, but that person missing their car payment and having their car repo'ed because of that missing money, and thus not being able to make it to work and getting fired is another.

Re: China’s Payment Apps Give U.S. Bankers Nightmares

#83

Post by frockington » Wed, May 23, 2018, 7:37 PM UTC

xstartup wrote: post #62

If money has to flow in the economy through limited hubs then hubs automatically grow rich. It should be a fundamental right in the capitalist country, right to process payment for any party. Today, we need special license/approval for this which limits the "access to disrupt" to few lucky people who have a connection in the big banks. Startups like stripe have to give away a chunk of their equity to old guards at bi…

I think the fear is that without this "license", you would have a bunch of "banks" that collect customers and then exit scheme to the Southeast Asia similar to the frequent ICO scams you see with cryptocurrencies

Re: China’s Payment Apps Give U.S. Bankers Nightmares

#84

Post by forkLding » Wed, May 23, 2018, 7:37 PM UTC

steve19 wrote: post #73

forkLding wrote: post #50

Its interesting how they didn't mention Paypal as a wannabe Alipay tech company, last time I used Paypal, its basically functioned as an alternate bank account that just doesn't accrue interest whenever I use it to buy stuff on the internet or sell stuff. I can also see the similarities between the UI of my actual online bank account and Paypal account. Users (like me) will also really appreciate if they took on more…

PayPal is already a bank. From wikipedia 'Since July 2007, PayPal has operated across the European Union as a Luxembourg-based bank'

I meant bank in the USA, although in many ways financial regulations in the EU should be more restrictive and complex due to member state issues so interesting that it hasn't done so in the US.

Re: China’s Payment Apps Give U.S. Bankers Nightmares

#85

Post by frockington » Wed, May 23, 2018, 7:39 PM UTC

tluyben2 wrote: post #70

gruez wrote: post #63

Earlier quoted context omitted.

how's that any different than payment processors like square, which allows just anyone with a cellphone onto their platform? >the store clerk will usually just accept on his private phone and put money in the till for you is that really a thing people do? the risk-reward ratio is all off. you take on the risk of possibly getting a chargeback (maybe the phone/account was stolen), in exchange for... nothing? it's not l…

Slightly offtopic; how easy is it to do chargebacks over there as it sounds trivially easy? On my dutch and spanish creditcards I have tried chargebacks but it is a royal pain in the ass; writing letters (in the actual post, not digitally) and providing proof for obvious things like hotel double charge.

As an American my experience has been clicking on a button on my account statement that says "Report suspicious" and then getting a refund in two days

Re: China’s Payment Apps Give U.S. Bankers Nightmares

#86

Post by fauigerzigerk » Wed, May 23, 2018, 7:41 PM UTC

charleslmunger wrote: post #71

fauigerzigerk wrote: post #46

Earlier quoted context omitted.

>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…

It's not really the core banking business in the US - interest is only about 50% of income for large banks. http://money.cnn.com/2017/02/22/investing/atm-overdraft-fees... And check out page 38 of BoA's annual report: http://media.corporate-ir.net/media_files/IROL/71/71595/BOAM... Interest income was $44.7 billion, non interest income (aka fees, trading, and services) was 42.6 billion.

Lending is still the biggest segment by far and some of the fees and charges are closely related to the lending business.

Also, most of the other segments are not exactly what I imagine tech companies will want to do either. In the case of BoA that includes the entire business of the former Merrill Lynch.

Re: China’s Payment Apps Give U.S. Bankers Nightmares

#87

Post by frockington » Wed, May 23, 2018, 7:42 PM UTC

IkmoIkmo wrote: post #18

the_watcher wrote: post #11

As long as banks get the FDIC guarantee while American WeChat-type competitors don't, they'll be fine.

Two different products tbh, we all throw it into (retail) 'banking' but, payment processing and savings/investments are different products that needn't exist under the same umbrella. Moreover, the median American has around $3000 in his bank account and a lot of people have negative cash balances. FDIC insurance isn't a big deal in the lives of many millions of people. And even if it was, there's no reason you can't…

How exactly does WeChat make money? I was under the impression that banks ate the cost of poor customers with a checking account and generated revenue from individuals who could use their money in other avenues. If anything WeChat might trim poorer individuals from the balance sheet for other banks

Re: China’s Payment Apps Give U.S. Bankers Nightmares

#88

Post by frockington » Wed, May 23, 2018, 7:44 PM UTC

khuey wrote: post #25

azinman2 wrote: post #24

I don’t know why our society hasn’t fully realized that everything is 3% more expensive specifically because of these fees. Europe at least has far lower upper limits on these fees. I hope someone is able to replace the banks here one day.

Because we like our 2% credit card rewards.

After and afternoons worth of research I've manged to get ~4% back on every purchase. As long as you have a decent credit sore you can really optimize your "cashback" and beat the fees. If you're one of the churner people I'm sure you could do much better

Re: China’s Payment Apps Give U.S. Bankers Nightmares

#89

Post by fzzzy » Wed, May 23, 2018, 7:45 PM UTC

nicoburns wrote: post #77

chatmasta wrote: post #32

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…

Anecdotally, I've only seen a few people using apple pay in the UK. Everyone now has contactless card (which you just tap on the machine to pay almost instantly), which as very popular. A lot of places seem to support apple pay, but it's much less convenient than contactless (obviously some people disagree).

Huh? Apple Pay uses the exact same NFC tech as contactless.

Re: China’s Payment Apps Give U.S. Bankers Nightmares

#90

Post by marnett » Wed, May 23, 2018, 7:48 PM UTC

Taniwha wrote: post #75

em500 wrote: post #66

Earlier quoted context omitted.

In China you can spend Alipay/WeChat at offline as well as online merchants. And not just larger merchants but also at micro-businesses like mobile food stalls and hole in the wall eateries. Because both the equipment and fees for the merchant are much cheaper than those required for traditional credit/debit card processing.

Exactly - WeChat is used for everything - homeless people on the street have WeChat QR codes - that gives you an idea how cheap that process is. Here in NZ I pay in cash (I kind of like the idea of an anonymous payment system) but these days younger cashiers often trigger ATM payment while I'm standing there holding cash and have to reach around and cancel it on the ATM terminal - it's the same in China but more so

cash is not perfectly anonymous. cash taken out of an ATM has tracking numbers assigned to you.