
Uber for banking? Coins.ph turns people into ATMs - jaysoncena
https://www.techinasia.com/coins-ph-people-atms/
======
Dwolb
I spent some time this summer learning about some of these issues if anyone
would like a little context about the Philippines.

Remittances are a way for overseas foreign workers (OFWs, think jobs like
maids in Saudi Arabia) to send money back home to their families. This is
typically (but not exclusively) the mother of the household who sends money
back to the father and children for things like food and school tuition. It's
not uncommon for this money to be squandered by those back home (i.e. used on
material possessions or vices instead of education)

Most remittance money flows through pawn shops who have come to act like small
banks for the unbanked. This works because low income people are typically
high risk lendees. So, pawn shops take physical collateral against any cash
loans. Naturally, these pawn shops got so good at making lending decisions and
moving hard cash around the provinces (low income areas), they've effectively
become the standard for low-income cash solutions.

Coins.ph effectively is throwing their hat in the ring to compete against pawn
shops and payment providers, creating competition in the cash market which
will (hopefully) increase distribution and lending transparency and decrease
fees (Philipino payment settlement is very fragmented).

My own opinion is Coins.ph is a really good idea for small retail solutions,
but not for P2P lending. The reason is crime is a huge issue in the
Philippines and Coins.ph is essentially a map of people who would be able to
be robbed if they carried substantial amounts of cash. Contrast this to small
retail outlets who can now be enabled to lend cash to customers using already-
established cash-handling processes.

I feel there would have to be substantial differences in norms put in place to
allow for actual P2P lending. i.e. stringent identity controls and social
features which de-risk the transaction for the lending party.

~~~
ronhose
Great analysis. One thing thats worth adding is the lack of efficiency in the
current system. The average cost of remitting money home for filipinos is
about 8% (~1/12), or in other words, filipino migrant workers work about one
month a year for free, just to pay off remittance fees.

~~~
HiLo
Not only does it make people targets, it's highly conducive to money
laundering - an oft forgotten, but EXTREMELY important purpose, that seems to
be too often forgotten in the fintech community.

------
Doobiedoo
Interesting. Apple patented getting cash from people around you (crowdsourcing
ATMs) in 2013.

[http://techcrunch.com/2013/01/31/apple-patents-
crowdsourced-...](http://techcrunch.com/2013/01/31/apple-patents-crowdsourced-
peer-to-peer-mobile-banking-that-could-use-itunes-to-provide-cash-on-demand/)

------
vvpan
Please don't call things "Uber for X", it's a completely meaningless sentence
most of the time. When you say "Uber for banking" to me I have to idea what
you mean.

~~~
mcphage
> I have to idea what you mean

Well you see, when you're carrying a lot of cash on your person, then you put
your location on a website, so anybody looking for someone with a lot of cash
can find you and...

...hmm.

~~~
HiLo
Playing devils's advocate, when have people, in all history, carrying large
amounts of cash not been strapped?

When I was in Nicaragua for awhile it was kind of known you don't fuck with
the cash dealers. From my experience, especially in these lower-income
countries where these services are targeted, you're either getting protection
or you're providing it; if neither, you'll quickly find yourself needing one
of the former.

I'm not sure how this would change with a Silicon Valley style startup, but
given Uber drivers don't know each other or have any "loyalties" for lack of a
better word, I'm inclined to think you'd be right. However, I can quickly
seeing this leading to the "dealers" on this system organizing into a group
for self protection. Or a gang, cartel, militia, party, or advocate group,
whatever you want to call it. Dudes you don't want to fuck with. And that
doesn't sound conducive to a banking revolution, although maybe in the sense
that payments are a social system at their core could make this feasible.

------
larsthorup
In Denmark, our MobilePay system is often used to provide cash between
strangers when needed.

~~~
SmellyGeekBoy
PAYM in the UK, too.

~~~
Wintamute
PayM (and MobilePay I gather) is basically a table of bank account details
keyed by mobile phone numbers, so you can make a standard electronic bank
transfer to someone's account number and sort code, with only knowing their
phone number. It's handy, but seems a bit different from crowdsourcing ATMs
and Bitcoin deposits?

------
blowski
Fascinating idea. It's basically like writing a cheque to somebody in exchange
for some cash, which used to be a thing.

I guess there's nothing to stop me doing this at the moment with PayPal or
some other peer-to-peer mobile payment service, though.

~~~
lox
The potential for charge backs is what would stop you with most payment
methods currently.

------
CM30
Hmm, this sounds like the kind of idea that's great in theory, but flawed as
hell in practice. I mean, the crime issue has already been brought up, but
this sort of thing means you're a great target for the local muggers, gangs,
armoured car robbing thugs, etc. You'd turn your users into the replacement
for ATMs in more ways than one...

And that's not even getting into the issues if this system has a security flaw
that criminals can exploit.

It's a neat idea, but perhaps an example of a service that doesn't really work
out well when done in a 'peer to peer' way.

------
mywittyname
So, Paypal with the ability to accept and dispense cash without a bank
account.

The biggest problem they have is that they are using Bitcoin instead of USD.
It's going to make it difficult and expensive for dealers to extract their
value in less used currencies. What will end up happening is dealers will need
to exchange BC for USD ($$), then exchange USD for their currency (more $$).
At that point, it won't be cost effective for dealers.

The volatility of BC is going to hurt dealers even more. Unless coins.ph is
willing to eat the costs of this volatility themselves.

------
smrtinsert
Seems like a Silicon Valley idea.

------
lisardo
[https://www.goabra.com/](https://www.goabra.com/)

------
VOYD
Yeah, that's not going to end well.

------
StriverGuy
This feels like a terrible idea.

