Uber for banking? Coins.ph turns people into ATMs | Hacker News Reader

Uber for banking? Coins.ph turns people into ATMs

techinasia.com

51 pointsjaysoncena27 comments

I spent some time this summer learning about some of these issues if anyone would like a little context about the Philippines.

Remittances are a way for overseas foreign workers (OFWs, think jobs like maids in Saudi Arabia) to send money back home to their families. This is typically (but not exclusively) the mother of the household who sends money back to the father and children for things like food and school tuition. It's not uncommon for this money to be squandered by those back home (i.e. used on material possessions or vices instead of education)

Most remittance money flows through pawn shops who have come to act like small banks for the unbanked. This works because low income people are typically high risk lendees. So, pawn shops take physical collateral against any cash loans. Naturally, these pawn shops got so good at making lending decisions and moving hard cash around the provinces (low income areas), they've effectively become the standard for low-income cash solutions.

Coins.ph effectively is throwing their hat in the ring to compete against pawn shops and payment providers, creating competition in the cash market which will (hopefully) increase distribution and lending transparency and decrease fees (Philipino payment settlement is very fragmented).

My own opinion is Coins.ph is a really good idea for small retail solutions, but not for P2P lending. The reason is crime is a huge issue in the Philippines and Coins.ph is essentially a map of people who would be able to be robbed if they carried substantial amounts of cash. Contrast this to small retail outlets who can now be enabled to lend cash to customers using already-established cash-handling processes.

I feel there would have to be substantial differences in norms put in place to allow for actual P2P lending. i.e. stringent identity controls and social features which de-risk the transaction for the lending party.

Great analysis. One thing thats worth adding is the lack of efficiency in the current system. The average cost of remitting money home for filipinos is about 8% (~1/12), or in other words, filipino migrant workers work about one month a year for free, just to pay off remittance fees.

Not only does it make people targets, it's highly conducive to money laundering - an oft forgotten, but EXTREMELY important purpose, that seems to be too often forgotten in the fintech community.

Interesting. Apple patented getting cash from people around you (crowdsourcing ATMs) in 2013.

http://techcrunch.com/2013/01/31/apple-patents-crowdsourced-...

Please don't call things "Uber for X", it's a completely meaningless sentence most of the time. When you say "Uber for banking" to me I have to idea what you mean.

Agreed, airbnb for banking would have been much clearer.

None of them make sense. "Crowdsourced via GPS" is the common function.

I recently overheard two girls talking about Tinder. One told the other it was "Like AirBnB for dating."

If you think for a minute that's pretty hilarious. Sharing economy indeed.

I interpret "Uber for X" as: Non-Professional people providing professional service X

Great marketing tool though, and taught to many budding entrepreneurs practicing their 40 second pitch as a way to get their meaning across super fast. Uber for banking means 'crowd-sourced' banking or banking provided by the masses -- was informative for me.

It's not completely meaningless, I interpret "Uber for x" to mean a technology company that is the middleman in furtherance of skirting laws/regulations.

Do you know how many Uber drivers have been charged criminally?

Just think of controversial or antiquated laws and build Uber on top to facilitate the transaction. Uber of drug dealing...Uber of prostitution...unlike Uber of banking I bet you know exactly what those mean.

> I have to idea what you mean

Well you see, when you're carrying a lot of cash on your person, then you put your location on a website, so anybody looking for someone with a lot of cash can find you and...

...hmm.

Playing devils's advocate, when have people, in all history, carrying large amounts of cash not been strapped?

When I was in Nicaragua for awhile it was kind of known you don't fuck with the cash dealers. From my experience, especially in these lower-income countries where these services are targeted, you're either getting protection or you're providing it; if neither, you'll quickly find yourself needing one of the former.

I'm not sure how this would change with a Silicon Valley style startup, but given Uber drivers don't know each other or have any "loyalties" for lack of a better word, I'm inclined to think you'd be right. However, I can quickly seeing this leading to the "dealers" on this system organizing into a group for self protection. Or a gang, cartel, militia, party, or advocate group, whatever you want to call it. Dudes you don't want to fuck with. And that doesn't sound conducive to a banking revolution, although maybe in the sense that payments are a social system at their core could make this feasible.

You can just meet at the local bank. Who's going to rob you inside a bank instead of robbing the bank?

I think when people use the "User for X" they refer to the disruption Uber has caused to an industry, not so much the service of Uber itself.

In Denmark, our MobilePay system is often used to provide cash between strangers when needed.

PAYM in the UK, too.

PayM (and MobilePay I gather) is basically a table of bank account details keyed by mobile phone numbers, so you can make a standard electronic bank transfer to someone's account number and sort code, with only knowing their phone number. It's handy, but seems a bit different from crowdsourcing ATMs and Bitcoin deposits?

Yes. In Sweden also have something called Swish, you type in the phone-number of any person and can send money to him/her.

Fascinating idea. It's basically like writing a cheque to somebody in exchange for some cash, which used to be a thing.

I guess there's nothing to stop me doing this at the moment with PayPal or some other peer-to-peer mobile payment service, though.

The potential for charge backs is what would stop you with most payment methods currently.

Hmm, this sounds like the kind of idea that's great in theory, but flawed as hell in practice. I mean, the crime issue has already been brought up, but this sort of thing means you're a great target for the local muggers, gangs, armoured car robbing thugs, etc. You'd turn your users into the replacement for ATMs in more ways than one...

And that's not even getting into the issues if this system has a security flaw that criminals can exploit.

It's a neat idea, but perhaps an example of a service that doesn't really work out well when done in a 'peer to peer' way.

So, Paypal with the ability to accept and dispense cash without a bank account.

The biggest problem they have is that they are using Bitcoin instead of USD. It's going to make it difficult and expensive for dealers to extract their value in less used currencies. What will end up happening is dealers will need to exchange BC for USD ($$), then exchange USD for their currency (more $$). At that point, it won't be cost effective for dealers.

The volatility of BC is going to hurt dealers even more. Unless coins.ph is willing to eat the costs of this volatility themselves.

Seems like a Silicon Valley idea.

https://www.goabra.com/

Yeah, that's not going to end well.

This feels like a terrible idea.

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