Fintech Comes to America at Last
economist.com
economist.com
Wow. That's really surprising.
I haven't had to sign for a purchase in years. In fact the last time I did it, the idea of a squiggle being any kind of verification felt dodgy.
I can't read the rest of the article but they mention the duopoly of Visa and MasterCard (and I guess Amex is the only other issuer?) causing a stagnation.
Is that changing?
I feel so uneasy using my card when eating out in America vs Europe.
(everyone signing for card payments did also seemed weird at the time as, while there was no contactless back then, we'd been 100% chip-and-pin in Europe for some time, but I think that was a more well-known oddity of the US)
Is there actually any (pre-)authorization going on? My impression is as long as they have your card number, they can charge you whenever they want, the only deterrence being not committing fraud. Once I dined at a local restaurant (in the U.S.) and only realized I forgot to bring my wallet after the meal. I wrote down my credit card number and that was it.
For those who don’t know, in the US it works like this: a paper receipt is brought, which you write a tip amount on in pen and then sign. The total is then manually entered into the computer later on. Absolutely medieval technology.
It varies significantly depending on which European country you are talking about (we have massive social variations across our 30 or so countries), and then on factors within each country, down to the policy of specific pubs/restaurants and pub/restaurant chains.
In the UK, I've seen at least two specific cases (I don't eat out very much, even before the pandemic). These are: the waiter hands you a device where you can enter a tip as an amount or just click through to the final payment, OR the waiter themselves enters the final amount - without a tip - and then just hands you the device to press 'OK'. They will add a tip if you ask them in time. I haven't signed a card receipt for years.
Went into a gas station, bought an age restricted item. Was not ID’d. I end up having to replace my debit card multiple times per year sometimes because of fraudulent charges, etc. and can never keep track of my PIN. So I ask the cashier to process it as credit. He suddenly started asking for ID and wanted to record it. I’m guessing it was some sort of anti fraud measure but it was somewhat awkward.
Diners Club is also a thing.
My understanding is it's pretty tough to compete with the big guys in this market because you need to build out a huge network of vendors who accept your card for it to be useful to customers.
If we lowered or removed the regulatory burdens (especially at the federal level) then innovation would blossom and VCs would fund every challenger to the incumbents.
Here we don't need anything like CashApp or Venmo or Paypal, because our bank transfers are already fast enough and cheap for everyone.
One final thing that would be nice, if we somehow could get rid of the requirement for credit cards when online shopping. Here in Estonia we have our own bank link, where the shop sends the shopper with an encrypted link to his bank, where he can approve the transfer with prefilled fields. I know the Netherlands have their iDEAL that works in a similar way and other countries have their own systems, but there is nothing that is globally accepted. Using some data printed on a card is some stone age technology when compared to the other systems we are using to do online banking.
KYC/AML ensure our online applicants are who they say they are. It's a very straight forward regulatory requirement to safe guard the movement of money by US citizens and not foreign entities. This is one of many anti-fraud measures we take because fraud is a massive issue and capital loss is exceptionally hard to recover -- especially for internet banks where attacks come from all over. Fraud networks are extremely sophisticated and based on your remark about KYC/AML, I don't get the impression you appreciate the depth of it. It has nothing to do with low-income citizens except to the degree to which social determinants (lack of transportation) may prevent someone from getting their identification renewed, but this is a much bigger issue for that individual than just opening a bank account. Online banking is more accessible for low-income for this reason vs. brick and mortar who avoid branches in those areas.
For a startup or even a crusty old bank looking to improve margin and slim down their back office, services like Alloy make KYC/AML a very simple request/response component within our application. There's really nothing complex about it. I'll take KYC over HIPAA any day of the week.
I don't agree with your conclusion at all.
I note the "Square charges 2.6% on the average transaction; Stripe’s fee nears 3%. By contrast, China’s big fintech firms charge below 0.5%". Any difference is 100% regulatory.
In terms of raw economics, payment processing should be one of the most competitive markets bar none. Little details like that are reminders of decades of banks leeching productivity out of the real economy in the States. I expect people have been angry about that for so long they've lost any passion for it.
My post from 2019
Ask HN: Innovations in merchant online online credit card processing?
The claimed advantage of crypto is that there's no oversight or limits on the amount you can send, whereas banks report any transaction over $10k (or something like that) to the IRS.
I talked to someone who runs an investment fund about crypto and he said they bought some because maybe people will use it to buy "planes and stuff" one day. Seems dubious.
Plus, you know, they do have homes usually. Their tent on the side of the street. Not housed, though.
This is not how English works. Who thinks it does?
If I'm shirtless, is that an innate property of me as an individual? Should I refer to myself as person without shirt just so people don't get confused?
I understand the point you want to make, but you're not making it.
Why?
Regarding your point about shirtlessness if there were an entire media cottage industry dedicated to depicting shirtless people as barely-sentient zombies spreading their infection to all you hold dear, then yeah maybe you'd want to reinforce that people should still view you as a full person.
I think English is quite versatile and escapes your desire to circumscribe it.
The distinction isn't relevant to the discussion we're having, and that makes it feel inelegant and forced. Though I appreciate the patronizing recommendation of a multi-mainstream-award winning niche movie to help me understand it all.
See also: the UK's use of 'sleeping rough'.
I think the far more likely explanation is the typical euphemism treadmill: “homeless”, a neutral description, is perceived as a slur precisely because the people it describes are social outcasts, and so people wanted to stop saying it. Then stretched justifications for why “unhoused” is inherently less offensive were come up with after the fact.
Homeless is a term that includes rough sleepers, people in hostels, people who are sofa surfing, people in emergency accommodation, and in some places people who are vulnerably housed.
Unhoused is more specific than homeless.
https://www.paloaltoonline.com/weekly/morgue/2005/2005_08_24...