
New York is proposing the creation of a 'public Venmo' - mindgam3
https://www.vice.com/en_us/article/pked9v/new-york-is-proposing-the-creation-of-a-public-venmo
======
supernova87a
The piecemeal attempts to create a rational payments system are getting to the
point where the Fed just needs to acknowledge the need for a
free/secure/unified infrastructure run and regulated by the government. They
are starting to do this (Fed real time payment + settlement system) but not
fast enough.

Other countries laugh at us when we talk about the checks we have to write,
the scams we endure with mistaken payments / withdrawals without our
knowledge, or the fees we accept banks charging us.

We would never choose to have the system we currently do. We need to get over
the interests / lazy inertia holding us back.

~~~
chimeracoder
> Other countries laugh at us when we talk about the checks we have to write,

Checks are increasingly rare in the US as well. Ask someone under the age of
25 how often they write a physical check to someone who _isn 't_ their
landlord. (And even many landlords are starting to accept other forms of
payment these days).

Personally, I don't think I've written a physical check in at least five
years, except to my superintendent (holiday gift - I don't want to send cash
by mail, and it's the one time that a physical check is actually the most
convenient way to pay someone).

> the scams we endure with mistaken payments / withdrawals without our
> knowledge

SEPA, which is what is used in Europe, is actually vulnerable to mistaken
payments and similar scams as well. It's _faster_ than ACH, but it's just as
easy to send money to the wrong recipient (and just as difficult to rectify if
that happens).

~~~
supernova87a
Well, at least it's _your_ mistake that you make. (I agree that some better
checksum or verification before you press "send" might be good).

In the US, people can withdraw from your bank account if they have the
numbers. And it's on you to detect and report the fraud to get it reversed.

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the_watcher
> “Why should we have to pay to use a payment system? It’s like paying to use
> a street,” Hockett asked at a press conference announcing the proposal.

I'm probably ambivalent about a "public" banking system, but this comment
seems to ignore that we quite literally do pay for using streets in the form
of taxes (indirect) and tolls (direct).

~~~
globuous
Don't we pay for streets though, indirectly through municipal taxes or what
not ?

~~~
the_watcher
That is exactly what my comment stated.

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haltingproblem
India UPI was proposed and implemented by the Central Bank and provides a
fantastic example of a low-to-zero cost option of intra-bank money transfer
which is bank and vendor neutral. Google recently recommended the model to the
Fed[1].

However, what NYS is proposing is distinct from an open payment system. This
is a closed parallel system of exchange which serves as both a bank account
and a payment system. I don't get how this will be better than providing low-
cost bank accounts to the unbanked and then providing an easy payment system
on top.

Or perhaps requiring banks in NYS to provide free accounts to those whose
income is below a certain threshold. Certainly another way to bell the cat
rather than creating an alt-currency and a ledger.

[1] [https://www.bloombergquint.com/business/can-indias-upi-
becom...](https://www.bloombergquint.com/business/can-indias-upi-become-a-
global-model-google-thinks-so)

(edits: grammar)

~~~
captn3m0
Correction: It is run by NPCI (National Payment Corporation of India) which is
a multi-bank private non-profit body that is authorised by the central bank
(RBI) to run a payments system.

Additionally, the central bank already runs a vendor neutral bank account
transfer infrastructure called NEFT which recently became 24x7. UPI just
happened to be mobile first and we had enough underlying infra to support such
a thing.

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flyingfences
If this turns into an open-source and independent application/enterprise then
it could be quite interesting and maybe even good. Unfortunately, I'm fully
expecting the end result (if this proposal even goes anywhere) to be a heap of
state-run opacity. There's no way I trust the State of New York with my money.

~~~
teilo
I think the more likely scenario is that NY would contract the transactional
system out to some company, and force banks to setup special account types
that interact with the system, and pay licensing fees for using it. And setup
a clearing house to enable end users to get accounts from the participating
banks.

And "force" is more hyperbole. It goes without saying that the banks will not
pass up the an opportunity to add a significant amount of cash to their
reserves, and will lobby heavily for it.

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jszymborski
Canada's interbank network Interac has allowed for "Interac eTransfers". It's
run as a for-profit, but since it's a consortium backed by banks in Canada,
most banks don't charge for eTransfers.

Among my friends, it's the way to pay for _e.g._ your share of the take-out,
or pooled office gifts.

~~~
rockostrich
Similar things exist for banks in the US. For example, Zelle is a product
created by a company owned by a number of US banks that is integrated into
those banks' apps as well as most other banking apps (my smallish credit union
uses Zelle). I tend to use Venmo still because more of my friends have it and
I think most people in the US will stick with Venmo unless the barrier of
entry for a new system is negligible.

------
codersarepeople
This is aimed at solving one of several problems people without bank accounts
have. So let's just figure out why people don't have bank accounts and account
for that:

> People who are unbanked often cite distrust of the banking system, lack of
> access to government-issued ID, or inability to maintain a minimum balance
> as reasons they don’t have bank accounts.

Seems easy enough to me. Make government-issued IDs free, make account
minimums illegal for FDIC insured banks, and if you don't trust banks, you
have nobody to blame but yourself (plus, if you don't trust banks, why would
you trust gvmt-venmo?). These fixes would also address a lot of other problems
(voter ID issues, other negatives of not having a bank account)

~~~
Denvercoder9
> if you don't trust banks, you have nobody to blame but yourself

Well, the banks made a pretty good case for why they can't be trusted in 2008.

That doesn't mean I don't use a bank. It's just not practical to go without
one, and I trust the government-backed insurance of my funds for when the bank
fails, but I don't trust the banks themselves one single bit.

~~~
bobthepanda
Even with deposit insurance, if there's a run on your bank you want the money
out ASAP, because the money is only useful to you if you can reasonably access
it, and waiting a few days or weeks for a check in the mail can make or break
people living paycheck to paycheck.

~~~
Denvercoder9
Yes, you're absolutely right, that's why I have split my money over two banks.
Hopefully they won't fail at the same time.

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biolurker1
There is already an open source payment system which needs a bit fine-tuning
so it can scale to payments. No government, serves all unbanked. Solves the
same problem. You know the name.

~~~
kilo_bravo_3
No payment system will ever succeed unless someone can use it to purchase
something from an unknown person, receive their good or service, be
dissatisfied with the good or service, return the good or service, and then be
assured of a refund from an unknown and untrusted actor.

Even with cash, in the vast majority of cases you physically hand over the
cash to someone you can see at a location you can return to. In the event of a
transaction for physical goods at least you have the good in hand, and in the
event of services thanks to government regulations most expensive services
require licenses so you can later find the person who failed to perform the
service you paid for in cash to your satisfaction. Also, one can create an
actual, literal, "paper trail" by requesting a physical receipt-- one that
serves as evidence of the exchange and would ideally contain contact
information.

With your un-named payment system, can I do a "charge back" if I order some
totally legit good or service from an unknown actor in an unknown location in
the event of the non-delivery or fraud?

Also, no payment system that requires an internet-connected device (and a
powerful one at that if no third parties with the ability to store and process
large amounts of transaction data are involved) will ever, ever, despite the
protestations of its acolytes, between now and the heat death of the universe,
ever be able to serve the unbanked.

That why with the IVL part of the proposal is a physical card that can be
used, if a patron is poor and unbanked and does not have an internet-connected
device, to transact with the ledger via a trusted intermediary.

~~~
flyingfences
> return the good or service, and then be assured of a refund from an unknown
> and untrusted actor

Escrow systems are inherently a second layer atop a currency. The "issuing
authority" of a currency does not engage in such dealings with the users of
the currency; these arrangements are made by the seller (or a palatable third
party on the seller's behalf) or by the buyer (or a third party contracted by
the seller, e.g. a credit card company).

With the "un-named payment system", escrow is entirely possible and has been
successfully set up in many instances, most notably on popular darknet
markets. A type of protocol-layer escrow is also possible, by the way, through
the use of multi-signature transactions.

> payment system that requires an internet-connected device

This is _exactly_ what the OP article is proposing to build, and what these
comments are discussing.

> no third parties with the ability to store and process

SPV and other "light" wallets that remain cryptographically verifiable and
decentralized without needing a constant, high-bandwidth connection exist and
are, in fact, the default option for most people.

~~~
kilo_bravo_3
>This is exactly what the OP article is proposing to build, and what these
comments are discussing.

If you read the white paper, which apparently nobody else did, they say
(paraphrased) "Look, this thing is online but we recognize that not everyone
has a computer or cellphone so part of the system is a physical card like a
debit card that poor people can use".

------
nickthemagicman
Are government run digital payment systems a cyber-security nightmare?

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ThePowerOfFuet
>"public Venmo"

Europe figured this out years ago; it's called a SEPA transfer.

------
brenden2
Generally seems like a good idea, minus the part about it being state owned
and operated. If it's operated by the state, it will probably be a disaster.
Many governments can barely keep their Windows machines up to date, leading to
ransomware attacks. It would be a shame if people's money were held hostage
for ransom.

~~~
atonse
I love how we say this with a straight face and ignore the fact that the best
hackers _anywhere_ are mostly currently or formerly employed/trained by the
government: NSA, FBI, same with Israeli hackers trained by the IDF, Russian
and Chinese hackers, pretty much everyone is a current or former state actor.

So yeah I'd trust NSA lending its talent to securing our payments
infrastructure over some of the people that were in that Google thread that
got paid 300k to do hardly any work in years. But this is a false dichotomy.

~~~
refurb
I somehow doubt the NSA would be the ones building it. It would probably be
farmed out by the govt like the ACA website.

I agree it would be terrible if the govt ran it, but would make sense is for
the govt to actually plan it and put regulations around it. Provide a
framework for private companies to work off of.

~~~
atonse
That's why I said lending their talents. The NSA and FBI would definitely
consult on something that big.

Actually they'd do it regardless of whether it was built by the public or
private sector.

I'm in the DC area – so I know exactly how bloated and utterly incompetent
most defense contractors are (I worked for a couple). So I have nearly zero
faith in them doing a better job.

------
Tycho
What about Venmo for beggars. Cities in the UK have foreign beggars camped
outside every grocery store near the city centres. Locals do not know what to
make of this. Are they desperately poor, or part of a scam to exploit people’s
generosity? Do they make £10 per day or £200? What can the authorities do if
there’s no law against it?

If there was a sort of begging venmo app where you could donate money, but it
only worked up to a certain limit each day, then at least you’d know the
public was not being exploited by professional beggars, and genuine beggars
would see a bigger share of the public’s generosity.

It could even go further and show what the money gets spent on (in aggregate),
so we could definitively answer debates like whether beggars spend all their
money on drugs/alcohol.

~~~
pathartl
Or we could implement a basic standard of living where we don't have to have
beggars.

~~~
Tycho
How?

