Comment by DaiPlusPlus | Hacker News Reader

Comment by DaiPlusPlus | Hacker News Reader

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Credit card networks impose relatively high minimums - so transactions under ~$4 USD don't make it worthwhile. PayPal has their own microtransactions scheme (which is difficult to get approved for), I assume PayPal has enough clout to pull it off.

The other approach: having a PAYG balance, has the problem of requiring users to pay a somewhat larger amount up-front (e.g. $5 or $10) which is off-putting to people who've been burned by "use it or lose it" policies - and the difficulty of getting money back out again.

The Lightning network for Bitcoin was meant to solve the microtransactions problem for Bitcoin, but it isn't the early 2010s anymore when we (on-the-whole) were largely still Bitcoin optimists: Bitcoin as a "brand" for normal consumers is dead at this point.

One would hope that that because the major credit-card networks' processing systems are mature (as in, COBOL-mature) the fixed/marginal costs of processing transactions would only go down over time - so with inflation then we should see microtransactions become an affordable option, but that hasn't happened - I'd like to see some kind of pro-consumer regulatory investigation into Visa and Mastercard's businesses, but I doubt that's a high priority for anyone right now.

Unfortunately, a lot of American banking infrastructure is hard-coded on ancient systems, so it’s entirely possible that initiating a single transaction really has reached it’s price-bottom. That’s also why it takes 2 days to send money to people, in an era of instant communication.

Many companies (like Stripe and Venmo) mask these deficiencies. But when you have to do something like a wire transfer, you find that it’s all an “abstraction” over some really ugly systems.

I suspect that’s why there’s no institutional movement to build something better. It requires a ton of hard-coded systems to change, in lockstep…just so banks can charge you less? It would be like trying to change the entire US electric grid from 110V to 220V to reduce the cost of transmission.

FedNow was SUPPOSED to be the answer, but I haven’t heard a word about it since it was supposedly launched over the summer. Rumor is that no bank wants to touch the system even though it’s better…

Edit: After learning that FedNow IS getting taken up slowly, I guess the analogy is more like: FedNow is like a huge 220V line running through the center of the country, and all the banks/power stations have to run a line to it now. And maintain the existing lines at the same time.

For the pedants: Yes, overhead lines don’t run at either 110V or 220V, but I felt that made more sense than talking about changing from 60Hz to 50Hz

> That’s also why it takes 2 days to send money to people, in an era of instant communication.

I always assumed anti-fraud had something to do with it. Give the victims time to notice and the institutions the ability to reverse transactions without loss

I think it's naïve of you to assume that an inefficiency in the financial system is, in any way, for the benefit of the end-customer.

Perhaps. But what I described benefits the institutions as well, no?

> I always assumed anti-fraud had something to do with it.

The banks must have had a good PR campaign going because I was under this impression for a long time too. Something didn’t click when I learned that mistyping a single digit in an ACH transfer means your money is gone forever…

FedNow is helping a lot, but adoption takes time. The middlemen's APIs have to adopt it, test it, then the tools that use the APIs have to do their own round of that, then the businesses that use the tools that use the APIs have to design, develop and deploy the new features, then the users of the businesses that use the tools that use the APIs have to adopt those new features, and then you have adoption.

You can see it in action. Plaid for example: https://plaid.com/blog/get-access-to-the-fednow-service-via-...

You shouldn't make up completely wrong claims to use as an analogy. The US grid doesn't run at either 110V or 220V, it's much higher. The 50/60Hz thing doesn't make any sense as an analogy either, because there's no significant advantage to either, it's just arbitrary.

You really should just delete your comment if you can't come up with a decent analogy, or edit it to eliminate the analogy that makes no sense whatsoever and makes me completely ignore whatever point you were trying to make. Maybe it's OK for some non-technical audience where they have no idea how electricity works, but this is supposed to be a technical crowd, isn't it? Or is it? Sometimes I wonder.

> You really should just delete your comment if you can't come up with a decent analogy

I think you're being unreasonable. False/untrue analogies still work as a rhetorical device and we can appreciate the point being made.

Pedantry has its place (peer-review of scientific papers, for example), HN comments is not one of them. This is how a community develops a reputation for being hostile.

(Now I'm going to feel horrible about myself for even letting myself be tempted to respond to a comment like this in the first place)

Damn sorry I offended you with my stupidity. Like many people, I have a limit to the things I know. Any ideas on what might have been a decent way to phrase that analogy?

The above poster was pedantic, rude and certainly not writing for your benefit... I wouldn't waste time soliciting their opinion on anything.

Your comment was fine. It added to the discussion, and even if the analogy wasn’t accurate, it made your point effectively to a lay audience. So I think that is a net positive. Ironically, the reply to your comment by the poster you are replying to added nothing and actually detracted from the discussion.

I've been trying to find a bank that does consumer-level FedNow outbound transfers. So far, no joy. Many banks have receive-only FedNow - they can receive money, but not send it. The US Treasury's Fiscal Service, the part of the government that sends payments, is going to be using FedNow. So banks want to be connected enough to receive money faster.

There are some online services for companies that make lots of outbound payments. JP Morgan Chase and BNY Mellon offer that. But outbound FedNow at the consumer level, not yet.

Part of the problem is addressing. The clever thing about PayPal is that your email address is your inbound payments address. The banking industry hasn't figured out the consumer-facing side of this yet. FedNow at the Fed level is about the same as ACH at the Fed level - just faster. You need receiving bank account info. There's a "request for payment" mechanism (i.e. a bill), but how does that reach consumers?

Singapore handles this well through their PayNow system, addressing can be handled by phone number, QR code, or entity ID. Obviously they didn’t have the same level of technical debt as the US did, but it’s possible to do this in a consumer friendly way.

This doesn't seem that hard to get around, with a bunch of $0.99 games and in-app purchases on mobile stores. iTunes did it too with songs, before Spotify took over. Seems like a simple opportunity for any payment processor middleman to just batch up transactions and run them through the CC processor at the end of the day/week/month. If the middleman doesn't want to, each individual publication can still just tally up your totals and then bill you each month.

The App Stores work-around that by invoicing customers once-per-month for all the accrued IAP microtransactions the user makes.

> Seems like a simple opportunity for any payment processor middleman to just batch up transactions and run them through the CC processor at the end of the day/week/month

That only works if there's enough independent publishers who agree to band-together and commit to using a single payment processor. I doubt this will happen.

Well, or at the end of my comment:

> If the middleman doesn't want to, each individual publication can still just tally up your totals and then bill you each month.

It seems like a really easy middle ground is to just allow pay-per-article views on mobile, which already have batched microtransactions built in. But even that isn't a thing.

I suspect it isn't just a technical/billing issue, but a lack of willingness to pay the desired prices...

> It seems like a really easy middle ground is to just allow pay-per-article views on mobile, which already have batched microtransactions built in. But even that isn't a thing.

That would require users to install an app in order to take advantage of IAP (which then means losing 30% of the revenue to Apple or Google). People aren't going to install an app just to view (and pay for) articles on whatever blog-host the writer is using.

It is the fate of any (and every) "Viewer app" to turn into a web-browser, and a sub-par one at that.

I thought batching like this was Patreon's main value add.

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