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

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

#91

Post by clairity » Wed, May 23, 2018, 7:51 PM UTC

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…

as i understand it second-hand, you can effectively no longer get a federal charter to be a bank if that’s not your sole purpose, because of the high regulatory burden that comes with it.

nordstrom, for example, is/owns a bank (until recently, it seems it’s been sold to charles schwab) but that’s because they got their charter in the 90’s before the regulatory burden became prohibitive (and was grandfathered in).

so i’m not sure tech companies can easily verticalize into banking.

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

#92

Post by nneonneo » Wed, May 23, 2018, 7:54 PM UTC

ForHackernews wrote: post #56

bas wrote: post #41

Earlier quoted context omitted.

Remember that we still call our pocket supercomputers "phones".

Again, only in America. They're "mobiles" many places.

When I was in Korea, the term "handset" seemed ubiquitous among the English-speaking people I interacted with. This is even stranger because, as I understand it, the Korean term is a transliteration of the English "smartphone", so I don't know where people were getting "handset" from.

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

#93

Post by amorphid » Wed, May 23, 2018, 7:54 PM UTC

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.

Personally I avoid, and eventually forget, places that don't take credit cards. Also, dealing with huge piles of cash is a huge pain. As a business owner, I'd go cashless if I could just to avoid the overhead of dealing with trips to the bank, getting coins, etc.

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

#94

Post by vkou » Wed, May 23, 2018, 7:55 PM UTC

dzonga wrote: post #76

stcredzero wrote: post #58

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. My wife works in banking, for a small local bank. The regulations are heavily skewed against smaller banks. Regulations around consumer mortgages seem to be designed to keep smaller banks out. Unle…

smaller banks also provide protection against 'too big to fail' syndrome. They won't over leverage risk.

If they don't actually own the mortgages that they issue, and instead sell them on the credit markets, then neither big nor small banks overleverage risk.

As I understand it, it doesn't matter if they are Chase, or BECU - most banks don't actually own any of the mortgages they issue.

The problem in 2008 was the fraud, the irrational exuberance, and really dumb investments by the investment branches of a few investment banks. The retail arm of, say, Wells Fargo, which issued a whole bunch of shitty mortgages was fine.

Whether or not you think that investment branches of banks deserve to be bailed out is an exercise for the reader.

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

#95

Post by intrasight » Wed, May 23, 2018, 7:57 PM UTC

The May 3 edition of "The Economist" had a special section on this topic which excellent.

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

#96

Post by yardstick » Wed, May 23, 2018, 8:17 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).

I’m one of those that disagree :)

I prefer Apple Pay over contactless as you can often go over the £30 limit of contactless. Eg I’ve spent £80+ at Waitrose and paid using Apple Pay. Plus it is more secure- you must authenticate to use it- and that added security doesn’t take long at all (under 1 second to Touch ID). I’ve got 3 cards (two debit, one credit) linked to Apple Pay.

I only have one contactless card, which is just to replace my Oyster card for tube/public transport travel, and that’s only because it’s quicker to pay with when going through the gates. I explicitly called the banks and told them to send me non-contactless versions of all my other cards.

Oh, and Apple Pay doesn’t suffer from card clash. Which is one of the other reasons why I only have one contactless card in my wallet.

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

#97

Post by raverbashing » Wed, May 23, 2018, 8:18 PM UTC

fzzzy wrote: post #89

nicoburns wrote: post #77

Earlier quoted context omitted.

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.

Why would I want to pull my phone, unlock it, if I can just tap my card instead?

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

#98

Post by yardstick » Wed, May 23, 2018, 8:23 PM UTC

raverbashing wrote: post #97

fzzzy wrote: post #89

Earlier quoted context omitted.

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

Why would I want to pull my phone, unlock it, if I can just tap my card instead?

If you have more than one contactless card, you’ll need to remove it from your wallet to pay. That’s slower (at least for me) than pulling out my phone, thumb primed on Touch ID so it’s already authenticated before I tap.

Plus, if my card is stolen, it can’t be abused on multiple cheap contactless purchases. Sure the bank will refund, but it’s still a pain of a process to go through, especially if the bank pushes back at all.

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

#99

Post by TACIXAT » Wed, May 23, 2018, 8:37 PM UTC

I applied to YC to bring this idea to the US (rejected). Credit cards are our primary form of digital money and their fees are excessive.

The basic design was ACH money into the wallet, transfer money between balances for ultra low cost (1%), ACH money out of the wallet.

The difficulties are regulation. Doing this would make you a money service business and banks really don't want to touch that. Plus it costs a nice chunk of change to register in every state.

If card processing companies are taking around 3% + 30 cents of each transaction, they've effectively devalued our money by that much. I think you could skip all the NFC terminal nonsense and just do QR code based payments with the camera. Make low fee transactions a reality. Then you could pay for individual news articles online, support forums monthly (no way to pay a fraction of a cent for a page view), or tip your favorite streamer. It would be beautiful. It could also set us free from the ad based tracking economy.

Maybe one of the big players will implement it (Google, Apple, Walmart), or at least figure out the business model for someone to copy. I think it could really change the US economy.

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

#100

Post by TACIXAT » Wed, May 23, 2018, 8:44 PM UTC

chii wrote: post #9

hclalpha wrote: post #4

This has been like this for at least 2 years over there now. This is facebook/whatsapp best's and only strategy to stop living off consumer data and start living off an actual service industry. Very poor management decision from my perspective, perhaps they had trouble gathering political support.

> stop living off consumer data and start living off an actual service industry. the apps in china boomed due to the fact that credit cards weren't popular nor available at the time, and the opportunity for the app (wechat) to become the payment method presented itself. This can't happen in the western world, because credit cards are so ubiquitous, and displacing it is high neigh impossible.

Background on the two. Alipay started similar to eBay, serving e-commerce, and WeChat payments captured the P2P market. Both have expanded to physical retail.