Banking on Status (2020) | Hacker News Reader

Banking on Status (2020)

julian.digital

13 pointsmooreds9 comments

Banking is an extremely constrained product.

Whether it's formal legal rules, or the customer taste for "I don't want a credit card that's only accepted at six stores I never use", you can't really change the offerings. In a world governed by economic sanity, the obvious conclusion is "run it as a tightly regulated monopoly for maximum efficiency and pass the savings back to the parts of society doing more interesting things".

But we live in a free-market cult, so we still have to try to invent a reason for competition. This means trying to doll up the product with periphery (a more attractive physical card, or a rewards scheme that's optimal for a different usage pattern), or fiddling around with the prices and fees.

On a specifics level, he's years behind on the cross-promotions though; here several local sports teams slap their logos on the local credit unions' card offerings. How much they're paying for the logo instead of returning to account-holders through better rates is not disclosed.

> run it as a tightly regulated monopoly for maximum efficiency

Name a real world monopoly that maximizes efficiency.

The UK’s NHS delivers healthcare to everyone at half the cost of the US system (9% of GDP vs 18%)

Doesn’t get more socialist than a healthcare system for the people, free at the point of use, paid by taxation.

Hence it’s being dismantled to ensure that answers to questions like these line up with ideology.

Depends on the definition of efficiency since a lot of it comes down to who or what is deciding to

> pass the savings back to the parts of society doing more interesting things

But in terms of successful monopolies, a lot of state-owned oil companies like Saudi Aramco, transportation companies like SNCF, Google 10 years ago, and Bell 50 years ago

It doesn't need to be maximally efficient, just efficient enough that we can stop thinking about it. Lots of electric utilities fit this bill. So does the post office. I'm sure there are others. These organizations aren't fighting to save every penny or inventing new features nobody is asking for to differentiate themselves from other offerings, but shopping around all the time has a cost too, so we're probably better off just letting the post office be a little inefficient. It costs us each an extra few cents per stamp, but in return we don't have to shop around for stamps and there is always a post office nearby, everywhere in the country.

> Signaling, however, grows stronger the larger the out-group is – as long as the out-group knows about the in-group. This is why luxury car manufacturers deliberately extend their advertising campaigns to people who will never be able to afford their cars: they are increasing the size of the out-group by educating people about the in-group.

I assumed that car advertisements were only targeted at those who might possibly buy the car. I didn't think that car advertisements could be "educational material" about how cool your friend/acquaintance is for driving this car.

Funny he mentions Revolut x 100 Thieves… Cash App got there first.

https://twitter.com/cashapp/status/1384601992463482880

Cash App also has a fashion label: https://www.cashbycashapp.com/

Of course, Cash App also has multiple angry state AG offices.

Reading this makes me despair for our species.

just drive the right car, to the right venue, with the right arm candy and buy the right drink with the right card. Your life is set.

Honestly I wonder what life will be like in 100 years.

This book might give us clues:

https://en.wikipedia.org/wiki/The_Inevitable_(book)

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