Open Banking and Payments Competition
bitsaboutmoney.com
bitsaboutmoney.com
It's really just f**ing ridiculous that some of the earliest and most important digital systems we have are allowed to wall in their data with no API access. Banks suck so goddamn hard and are allowed to operate without any real competition and don't innovate at all. They are the definition of regulatory capture.
It's not really the banks' fault. They're all stuck leasing expensive information systems from entrenched third-party technology shops. They don't have software development dollars and they are extremely risk averse, to a paranoid degree. Thank the regulatory environment for that (state and federal).
Companies like Moov.io are trying to crack open this space and provide the levels of integration we see in other industries.
But it's really hard and slow.
At the time I was using ledger for personal accounting. Ledger is amazing and incredibly flexible. Writing the journals with detailed financial data is way too time consuming though.
I tried to write software to pull this data from the banks. Got in touch with the managers at my bank and everything, they even referred me to their devs. I just needed read only access to my own bank account.
I eventually discovered I needed permission from the goddamn central bank to do this.
I also tried to integrate with my government's electronic consumer receipt systems. The idea was I'd scan the receipt with my phone or laptop camera and it'd download the data and automatically generate a detailed ledger journal entry with individual postings and metadata for every product I purchased. This was going to save me so much time it's not even funny.
I discovered I had to create a corporation to even ask the government for API access to my own data.
"Open Banking" is just… not open at all. Misleading name.
Had similar idea - just to pull my own data, tag transactions, etc etc, and have a nice stats. Nope, it is so "open" that it's just impossible to pass for single-user idea. "Open Banking" just gives me opportunity to show in my Bank A part of data from Bank B.
Do you treat your matrass like a bank? Maybe with the pidgin carrier protocol to do money transfers?
So that would not really constitute a bank that stores currency.
(I have nothing on crypto currencies, btw., and if it gives a feeling of agency to use them I applaud it)
Now that stonk people are in to BTC and it's worth is much higher, it's volatility is far less. It's still a speculative asset and with plenty of risk, but it's definitely a store of value for at least some % of one's savings.
If you start from there, you'll never understand bitcoin. I own bitcoin precisely because it is not what economists, bankers and politicians want me to own.
This thread was not about understanding bitcoins - but banking.
> I own bitcoin precisely because it is not what economists, bankers and politicians want me to own.
It doesn't really make sense to own something just because someone else are saying you should not own it - but whatever floats your boat and as long as your own the consequences of your own actions.
You might have been paid in bit coins, but the value of these bitcoins has to be declared at the day of transfer so you can pay taxes in your local fiat currency.
Nobody are disputing that it is a really bad idea to hold cash above an emergency fund. Everyone is highly discouraging you from doing it. Buy ETFs, stocks, houses, cars, cyrpto whatever you need - just don't hold large amounts of cash.
All in all, it makes a very little difference what you are paid in - just that you have extra hoops to pay your taxes now that you are paid in bitcoins.
> Nobody are disputing that it is a really bad idea to hold cash above an emergency fund. Everyone is highly discouraging you from doing it.
So you know that modern money doesn't fulfill one of the central uses of money that was known since the antiquity: store of value. And you know that people have to waste time to learn about investments instead of working their jobs and enjoying their time off. But you still think fiat money is great?
This explains your excitement! Great that you can leach on other people.
> But you still think fiat money is great?
Seriously, where did you get that from? I never argued for fiat money. I just said that bitcoins is not a currency by the ordinary understanding of a currency.
You don't hold your own money, you don't manage transferring your own money, you basically don't do any of the things a bank does. How does that make you your own bank exactly?
But I can't buy groceries or pay rent with it, so i don't see how it works for the usecase I was talking about above. There's lots of ways to convert back and forth but you pay fees on each conversion so it's not economical to use for payments.
There's PSD2 in the EU (or Eurozone? Not sure actually). Basically forces banks to open common APIs to encourage interopability and competition. However, it's not aimed at users but rather at companies in fintech building applications.
Some banks (Bunq comes to mind) offer APIs to their customers for direct use, but most don't. The reason is obviously security. People still fall for phishing, people still give fake bank staff their access codes on the phone. Giving normal users a way to have API access to their bank account would be disastrous for many of those users.
Now, it would be nice if things like PSD2 were a little more accessible and transparent. Currently you need permission from an institution like The National Bank to gain access. It's expensive and bureaucratic.
Basically, banks force apps or users to require you fully revalidate user consent every 90 days. And it's quite an annoying process. That means any app or integration you want to build, requires 10 minutes of your time every 90 days or they stop working. It's killed many Fintech's.
It all works on paper, but is drafted into law by politicians who have no clue about technical challenges and user experience. So in the end, it works exactly as designed by the banks: it doesn't
Long story short I can auto-import in Firefly III from EU banks only via a Canadian company and the quality of the process NOT due to GoCardless but due to local banks is terrible...
That's why stablecoins are booming...
I would have thought Apple Pay and Mobile Payment would pave the way for better Credit Card services, but right now most of them are glibbest on the statement. I dont remember which restaurant it is nor does it correctly show.
I basically want a central place for all my finance. Including discount on credit cards, savings, interest rate loan etc. And I am willing to pay a small fees for it.
Is this a UK thing? I've been searching for something like Mint/Quicken in the EU and haven't found anything worthwhile because there doesn't seem to be a standard for budgeting apps to connect to banks.
[1] https://developer.gocardless.com/bank-account-data/overview#...
I personally use Finanzguru (for the German market, it supports many banks).
Likely to be many others.
Clearly, I must have been searching wrong!
Not that it really is as open as many of us might like - the banks did a pretty good job of tying much of it up in red tape.
Some banks let you download in formats that let you then import into something. I have imported a lot into Gnucash from a downloaded file but its not smooth or complete (narrative needed fixing).
[1] https://apnews.com/article/synapse-evolve-bank-fintech-accou...
A sizable fraction of what bank employees do involves error conditions and fraud. The happy path has been automated for decades. One of the big discoveries when PayPal started up was that they were not in the money transfer business. They were in the fraud prevention business.
The issue is with fintechs that are not really banks, so they keep your money in a "program bank" where you are not the direct customer. You can't go to the program bank and say Fintech XYZ went belly up and I want my money, because you are not the banks direct customer (even though in some cases your name is legally on the account for FDIC insurance reasons).
Open banking tech is way more about the former than the latter.
Banks are pretty good at not losing data. They're also pretty good at layered security.
I mean there's fraud and theft on all levels, but collapse-level events don't come from "a hack or basic data loss". They come from political incompetence and large scale economic events.
you are confusing payment card issuers and processors with banks
Except for that day I logged into Barclays Bank (in the UK) and half the transactions were missing from the last several months of statements.
We're talking maybe 50 transactions just gone from the bank account ledger, which had long since been settled and previously downloaded (that's how I noticed).
To be fair to them, the transactions reappeared a few days later. But it took days, and had me quite worried.
Sometimes not moving fast and not breaking things has its advantages.
Everything is also constantly regulated to death (and not the good kind) and banks wait until the very last day (even when regulations were passed at EU-level 6 years (!!) ago) and you then need to rush implementing it in the last month.
After working there for a few years now it's hard to trust any bank. Better not think too hard about it...
Also there's a bunch of really annoying and expensive processes for rich people to get their money back after an error, so they don't see any problem.
its crazy and its here today
This is the conclusion of most articles about such topics. The conclusion is that we need less "knuckle-raps". Instead, a crippling sledgehammer blow to both kneecaps followed by a warning that the next will be to the skull (of the company, to be clear) unless the banks entirely capitulate, accept a massive reduction in profits and executive pay, and fully open their entire systems.
Why does every employee in the US need to pay an accountant to file their corporate payroll taxes, when the corporation knows how much they paid and can just use THEIR accountant to report this same information? It would be standard across many employees. And in Europe that’s largely what’s done. But in USA this creates many “bullshit jobs”. The IRS just closed their free file under Trump admin, and even when they had it, you had no way to electronically submit business taxes, and even if you mailed those to the IRS (still allowed) some states have NO WAY for you to file taxes without an accountant!
To open an LLC in NY you must announce it in a specific newspaper they tell you. And that newspaper charges $700. Same thing — they lobby to keep this going.
How would my employer know how much money my savings, chequing and investment accounts make? I owe taxes on all of those as well as on my income.
How would my employer know what interest I pay on my mortgage, how much I contribute to charity and my other deductible expenses?
> some states have NO WAY for you to file taxes without an accountant
Which ones?
You don't need an accountant, and employees do not pay "corporate payroll taxes", they usually just pay income tax to the federal government.
And if you think tax liability is based solely on amount of pay received from an employer, then I think you must not have any experience with paying income taxes in the US.
>The IRS just closed their free file under Trump admin
Free Fillable Forms is still available for electronic submissions. What closed was the government provided alternative to guided tax preparation software like TurboTax.
> some states have NO WAY for you to file taxes without an accountant!
I doubt this. Please provide an example.
It's only even half about the business. Instead it is about the businessman making the pitch.
If someone is good at baking bread that suggest they are qualified to to bake bread. Running a bakery is a super set of that skill. The business plan request is a fantastic method to give such a person a chance to show they have the right resources, enough experience, and reasonable expectations and strong commitment.
Central banks keep its value higher than the alternative, as anyone who doesn't have oppositional defiance disorder would notice from the fact that we haven't had a Great Depression lately. Because it really gets devalued if there's an economic collapse and all the businesses you trade with cease to exist.
If you value being able to purchase a specific good X, and they stop making it, then you now don't have currency capable of buying it. Doesn't matter what kind of currency it is.
If you're using value in dollar value, that asset has the price behavior it does because we live in a stable economy with central banks, 2% inflation targeting and so on. You haven't seen the alternative because you'd be on the street.
What you want is TIPS bonds.
MTLs, money transmission licenses exist to say you can’t legally handle other people’s money without proving you’re trustworthy, solvent, and compliant with anti-crime laws.
Mainly this comes up during bankruptcy, but they can also just order you to return stolen funds you've received even if you would prefer not to do that.