Chamath says Visa and MasterCard will be the biggest business failures in 2022 | Hacker News Reader

Chamath says Visa and MasterCard will be the biggest business failures in 2022

markets.businessinsider.com

8 pointsthrowawaysea11 comments

No business likes Visa or Mastercard, but from the consumer’s point of view it’s some combination of: Short-term loans, an insurance and shield against fraud, and a well-established method of cashless payment.

Does bitcoin or other cryptocurrency address the former two?

Answer: it doesn't even address the third one.

In theory smart contracts (and some blockchain:world interface to handle customer service/chargebacks/etc) could handle these.

It's an exaggeration, but he is right about one thing: developing countries have built very successful alternate digital financial infrastructures to bypass the duopoly of American financial giants (Visa, Mastercard and Amex).

These indigenous FinNet (financial networks), and services built on it like China's WeChat Pay, AliPay or India's UPI, Net Banking, digital Wallets etc. are today the most popular and preferred digital payment mode online than credit or debit cards. Credit and debit cards still rule on PoS / physical retail stores (atleast in India). But Russia, China and India also have invested in their own national payment processing system to compete with Visa / Mastercard, and have taken away a substantial market share from them through their home-grown debit / credit cards (MIR/МИР in Russia, UnionPay in China, RuPay in India). The reduced market share due to these local competitors have cost Visa & Mastercard loss of billions of dollars in these countries. Once these national payment processors go global, Visa and Mastercard will definitely have to lobby to the US to enforce some kind of protectionist measures to safeguard their business.

go amex!

now seriously, his "web3" bet is naive, how much has he invested in silly crypto companies?

It's naive to begin adoption of the most failproof and performant settlement layer (especially with L2s), like MasterCard and Visa have made moves toward?

Non-crypto payment apps is also soemthing they should worry about. Facebook pay, Google pay, Apple pay, Amazon pay, Paypal, Venmo, Zelle.

FedNow instant payments, although not until 2023-2024. Drags US financial infra into the 21st century, and provides similar capabilities to instant payments in other countries (UPI in India, Pix in Brazil, etc). Likely ends up significantly shrinking Zelle (the private consortium competitor), PayPal, Venmo, Cash app, etc.

https://www.moderntreasury.com/learn/what-is-fednow

https://corpgov.law.harvard.edu/2020/08/31/fednow-the-federa...

I doubt it’d do much until the US solves anyone with your account number being able to draft it without your consent. One of my favorite things in the Netherlands is that any draft requires me to consent to it or it will be denied. I have 5 days to consent.

I can’t even count the number of times in the US where I’ve had to pay overdraft fees of one kind or another due to drafts I wouldn’t have consented to if I knew it would take my account negative.

I imagine at some point you’ll be able to disable ACH debits for your deposit account and only allow adhoc FedNow push/outbound payments, including those from payment requests. This would be parity with Netherlands deposit accounts (based on my cursory understanding of how they work).

Chamath? I think this is a signal for smart investors to put money into traditional card companies.

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