Comment by crote | Hacker News Reader

Comment by crote | Hacker News Reader

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> freedom to refuse unethical business

There is a massive difference between "unethical business" and "illegal business". As banks provide critical infrastructure, they should absolutely not be allowed to refuse business they consider "unethical", just like a power company should not be allowed to cut someone off because they think they are behaving "unethically".

As to "illegal business", the simple fact is that the bank doesn't know enough to make a meaningful distinction. It is simply impossible for a bank to know for a fact what a payment is for. They only know the source account, the destination account, the payment value, and a user-provided description. That's just not enough data to make a decent judgement. Plenty of jokers out there who will label their rent transaction as "extortion payment", after all.

Sure, if they have reasonable suspicion they should forward the information to the police, but they should not be allowed to block it unless given a court order.

> There is a massive difference between "unethical business" and "illegal business"

Can you explain the massive difference? For example, easy access to guns is legal in a handful of countries and illegal in most countries. Where it's legal to easily obtain guns but also illegal to buy alcohol on a Sunday, what does that imply in terms of ethics?

> As banks provide critical infrastructure,

There is no physical limitation - like a local electricity generator - that requires this "infrastructure" to be dominated by a few huge companies.

> the simple fact is that the bank doesn't know enough to make a meaningful distinction. It is simply impossible for a bank to know for a fact what a payment is for.

That's wrong. The bank reasonably knows what I'm buying from Porn Hub or the local butcher. Even if they don't know exactly what I'm buying, they do know how the local butcher generates the bulk of its profits.

What you're suggesting is that it be illegal to start a vegan credit card - only works at businesses where they don't harm animals. What we need instead is more choice, not less choice. Break up the near monopoly and reintroduce competition and you fix the actual problem - which is that a handful of payment processors can collude against a business or industry.

Banks don't know what you're paying for at Porn Hub?

Banks do know enough to price in risk. And there is your problem. They must be allowed to price in risk and if they are allowed to do that they can effectively deny business by making the price too high.

PayPal isn't a bank but does payments. The real problem is there aren't enough alternatives like that. The solution to banks having so much power is to give them more competition.

What does "give them more competition" mean? The fact that the landscape looks like it does is a strong suggestion that more competition might not actually be viable.

Another possible solution to banks having so much power is to regulate them more. I know a lot of libertarian types don't like that answer, but it is a valid answer.

> What does "give them more competition" mean?

It means you have far more choices in who to give your business to. For example, in a big city you can eat at thousands of restaurants. Or cook at home. However, I cannot choose from thousands of payment processors. With more payment processors competing for my business, I would get a better product and more choice.

> Another possible solution to banks having so much power is to regulate them more. I know a lot of libertarian types don't like that answer, but it is a valid answer.

I'm firmly not libertarian. Not even close. But I don't like to pull out the regulation stick until we see that more competition and a functioning market can't solve the problem. Since these transactions are now all digital, the potential for highly functioning markets has barely been explored.

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