- Many countries have had free banking for decades now. The USA's banks have finally decided to stop gouging their prices, but that's hardly innovation. Overdraft fees basically are just a made up problem in order to extract money from customers. European banks have had a notion of "no money, no purchase" for ages now.
Ditto with fast transfers and lower remittance.
True innovation would be more control over your money. For example, you could have a bank account with $100 in it, and you allocate dollars $0-50 to be "online" money. This can mean different things, but for the sake of example let's say that means that you can go to https://bank.com/user/endisneigh and if I give you a special code that I create you can take an amount of money directly from my bank account, specified by the code. No need to use something like stripe.
Another example could be the ability to automatically change where money goes depending on its source. Got a deposit via Venmo? It goes to X. From your work? Goes to Y.
The future is programmable money. That's innovation IMHO.
This is a thing in the Netherlands, between iDeal / Tikkie / and bank transfers. iDeal is used for payments online, it depends a tiny bit on your bank but you get a QR code and you scan it, it then does a direct bank payment from your bank to their account.
Tikkie is similar but is p2p. I can create a link or a QR code and send it to people. They can then use the link or QR code and send me money. Alternatively you can just use my account number (an IBAN printed on the card) and just transfer money.
These things are usually cartels between the local entrenched banks, and not the sort of innovation GP meant.
The idea is the existence of urls such as paynow://any-bank-at-all.com/user/endisneigh
No third party should exist.
Isn't that just PayPal/Venmo?
Why wouldn't you consider using a third party (no idea if Stripe can actually do the example described) as true innovation in this space? With a third party layer, banks don't need to reinvent the wheel.
> Got a deposit via Venmo? It goes to X. From your work? Goes to Y.
FWIW, this sounds analogous (not exactly like) N26's closed/semi-closed digital wallets. I guess if there's a use case for the example you proposed, it's not a huge leap to go from here.
Alas, I'm a very basic bank customer so I can't vouch for how good this feature is right now.
Crypto, (and I'm really not a fan) is at least doing some objectively innovative stuff. However it's not really linked with traditional fiat so isn't applicable broadly.
With a government mandated transfer method, nobody needs to, and all banks are interoperable.
I personally really like my bank transfers between any bank in the Netherlands being near instant.
Real time settlement isn't really an innovation. Its just something the banks fight to protect their float.
Similar, but with the vital difference that it doesn't depend on Apple, Google, Samsung and PayPal to continue working. Not to mention the trust that they will keep your best interest at heart when making future decisions.
Ownership of something that is valuable should remain in your control, not some 3rd party.
I like how just explaining your concept makes it seems almost impossible in one word.
Otherwise, from a bank perspective having a set of legal obligations for each account it handles feels like a nightmare. If you split your 10 billions into an infinitiy of smaller 1000s accounts, is it supposed to guarantee all of them if it goes under ? Does it report and audit each single account etc.
If these “accounts” are just a virtual partition of your money and all follow the same rule, why wouldn’t you just deal with them as separate entities in your excel sheets and let the bank have it as it is now ? If you have a clear business use (e.g. those are “wallets” for your customers) there are already banking entities providing these services, it’s a matter of paying them enough to work with you.
For non business accounts there are already clear cases where you would create new accounts (money that effectively needs to be under a separate ownership, or bound to a specific legislation, rule or currency), so it’s not like there currently is a limit on account creation, the friction added to create one is actually protecting the system from abuse.
(I think I've read about some banks offering this as a special feature.)
They can, in the same sense that people can take stuff from your front yard if they feel like it.
Salary gets automatically sorted into the pots when received.
One thing I can't quickly glean from their pages is: can I get proper API access to my account if I'm just an individual user, with no exorbitant price hike, requirements to be a large business, or to enter into an additional business relationship with the bank?
The litmus test I have for the dream bank I'm looking for: can I have a normal account and get an API endpoint, to which I could point a script and fetch my balance and transaction history? Without being forced to go through a browser to authenticate on each request, or any other kind of interactivity?
The Bunq API allows you to do a lot more than that though. https://www.bunq.com/api
It isn't, though.
This is my big disappointment with PSD2: it's an interoperability law for businesses, focused on enabling service providers. It doesn't help individuals directly.
PSD2 is why I can view all my accounts from different banks any one of the bank's webapp. PSD2 is why I can pay some third-party service to give me a fancy budgeting dashboard. Why, were I running a nontrivial business, I could do some banking using invoicing software.
But I don't want that. They all do a shit job at this. I can do better - I just need an API endpoint, preferably one that can do read-only operations and internal transfers with preauthenticated token, so I can automate most of my banking away. So my problem with PSD2 is that it didn't compel banks to give such APIs to individuals. And since it didn't, they mostly don't.
 - I could do that before PSD2, but back then, it usually involved giving them access in violation of the bank's TOS, and trusting the service won't just steal all my money.
 - That's not because they're bad technically, but because we have conflicting interest. The banks want me to do everything through their webapp and mobile app, because they want to upsell me more financial products. Budgeting services want me to use their UI, because this justifies subscription costs and also gives them further opportunities to surveil and monetize me. Meanwhile, all I want is to never see their inconvenient and bloated UIs. I want to run my own reports, my own analyses, my own stupid "account balance" widget, that requires no login, zero clicks, combines all accounts from all banks, and shows no advertising.
 - https://en.wikipedia.org/wiki/Principal%E2%80%93agent_proble...
It's not just a matter simply of inserting rows in a table - there is overhead and other matters to consider.
Disclaimer: I work on Wise.
(We're hiring: https://wise.jobs)
I get that you want to stop identical transactions within 5 minutes of each other, but I have a feeling there may already be stopgaps in place for something that simple.
New things that have never been done before are innovative. It may not knock anyone's socks off, but innovation is happening.
What you've described can be done today with smart contracts on a number of blockchains.
Are there really publicly accessible APIs I use to deploy that idea today?
You just described OpenBanking in the UK, SEPA in the EU and NPI in India.
Banks are making money by taxing every transaction you make with your credit card. People would be shocked how much they are paying the bank for the convenience if they were presented with accumulated, monthly payments.
This is all very cleverly architected so that you, the consumer, don't have to explicitly pay for anything.
It makes sense for banks to offer "free" checking account and "free" credit cards. They don't want you to be concerned because they earn so much more on interchange fees.
I've heard a lot about why they're bad but not that they're anti-competitive. In what ways are they?
> give you a special code that I create you can take an amount of money directly from my bank account, specified by the code. No need to use something like stripe.
That is a check, but digital.
In Australia, I initiate all of my payments on my side to the target account/company/etc. I am giving the money to you, not 'authorising you to take it' from my account. Having someone's bank account details only allows you to pay them, not request payments from them.
On a side note, I think a lot of comments on HN are well-articulated rubbish. I send threads of cool-looking technical discussions to close friends who research the area and usually it turns out they’re clueless and just speaking with authority. I take everything with so much more salt now than I did a few months ago.
I lived in USA in the 90's and then moved to Canada. Banking system here seemed lightyears ahead of American in terms of functionality, user-friendliness, technology. And it seemed to endure until relatively recently. By all accounts, Canada is behind truly innovative places.
So, though it's late to the game, a lot of those things are still "innovation", to USA, late-trickling as they may be.
I lived in Finland in early 90s - they had already gotten rid of cheques. Russia with Qiwi kiosks is quite innovative.
Why did banks want to get rid of cheques and why did they stay? The settlement was fast near the end with imaging etc. Basically Free. What did we get? email transfer? fuck I worked on building that in 2000. Can't believe it is still there with shitty limits for businesses.
It’s all wrapping my electrons in a database in firewall rules. The database outputs are pegged to one social meme or another?
you might like http://mikorizal.org and http://holochain.org
You think? I can't imagine a situation in which programmable money would be an advantage.
From the article:
>>The financial industry thought, for many years, that the customers added or retained by these improvements would be disproportionately expensive to service and low-revenue. Cash App has experimentally disproven that.
The fact that there are players in the financial field doing what the incumbents wouldn't and being profitable doing it is a pretty good indicator that innovation is happening in the industry.
>>True innovation would be more control over your money.
I won't argue that a higher bar might be for you to have more control over your money. But the article very much addresses this very thing. The innovation you may be missing, is that there are many unbanked individuals in the US (>5% based on a quick search), and this article claims this demographic is finding it easier to become banked, with less predation. This is probably a much greater increase in their control over their money than the marginal increase programmable money is going to have for your control.
Alliant for example has had same-day ACH for a while. Many credit unions also removed the ability to overdraft by default (technically this was always possible with a bank if you called).
Edit to add: Incidentally, while I’m always thrilled when my stuff ends up on the front page, I’m also a member of this community and know that there’s a limited tolerance for the same sites ending up on here on a weekly basis. In previous years I spaced out releasing essays to not annoy y’all, but I can’t do that with a weekly newsletter, so if folks can be selective in submitting these here I’d appreciate it.
I'm wondering if my local credit union wants to hold my BTC for me, if I wanted to do something like that.
They'll do that now with a piece of paper in a safe deposit box, no? Other options for their holding your BTC, including ones that let them make money off it and so offer interest to depositors, seem like they'd open up the same risks as existing relatively-reputable exchanges.
There's a move towards PoS, crypto is not synonymous with PoW.
You'll be displeased to know that scams occur with fiat as well as crypto.
Something you should add here is that free banking is also made possible due to the economics of the Durbin Amendment of the 2010 Dodd Frank act that allows smaller financial institutions to charge a higher interchange fees on debit transactions.
Most Fintech/Neobank players like Chime fall into this bucket and they are able to fund the operational cost of the checking account with the interchange fees of the debit card.
The details are a little hazy, but I'm expecting real instant transfers (not just between people but also between your own accounts at different institutions) and free access for everybody in the US.
Like crypto, but with real money.
Cryptocurrency already is real money. Its more real than anything the state can print from nothing.
1. Speed improvements over the legacy infrastructure e.g. instant transfers without a middleman. Itself, mostly a problem just in the USA.
2. Bypassing various international and national regulations.
Central bank digital currency retains #1 while rejecting #2 which is important for a nation's sovereignty.
"The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust." --SN
3. is important for ensuring you don't have the time value of your savings destroyed by inflation.
I am not clear how this helps. If bitcoin/ether becomes the dominant currency, 2008 crisis is still possible, but the recovery is not. So it seems like it would make things worse, not better?
Countries used to go to war over gold and silver, it does not seem to be economically beneficial to have a deflationary currency.
Deflationary currency would be bad for the current inflationary system and the small group of extremely rich people, but could be good for most people, who don't want to be in debt their whole life.
In what sense? We are observing massive devaluation, no?
No, we're not. USD is stable in the sense that it's not volatile like bitcoin and supports global economies.
Even transactions for physical goods are possible with a neutral third party facilitating escrow (zero-trust unless there is a dispute).
We've had that for years, all banks can adjust interest rate and block accounts.
As long as you're not previously convicted, registered sex offender, poor credit score or otherwise a "lower" human.
> Like crypto, but with real money.
"FedCoin" (a digital currency operated and maintained by a central authority) sounds like the opposite of a cryptocurrency.
I am slightly terrified of the short term consequences but it's a good idwa
> Free checking wasn’t free. Instead of most depositors paying a predictable (and relatively small) fee for their checking account, a tiny portion of the depositor base was assessed many, many $25-$35 fees stochastically based on how frequently their incomings and outgoings were temporarily mismatched.
Specifically the "depositor base was assessed many, many" part. Feels like the many before the comma is missing something. Maybe it should be times? "a tiny portion of the depositor base was assessed many times, many $25-$35 fees stochastically"
Not certain though.
"many, many" is a different way of emphasizing the word "many". So "assessed many, many fees" implies that there were more fees assessed than if they had just stated "assessed many fees".
Could have been rewritten as "repeatedly assessed $25-$35 fees" but it's understandable to me.
Just was a bit of a mental hiccup when I was reading which is probably why I picked up on it.
I think their current posted fees are 1.4% spread-only ($14 for $1000) or 0.3% spread plus core fees. I can't quite tell from the rate sheet but looks like 550 JPY for a 100,000 JPY trade. I guess that would work out to about … $8.50 per $1000? Is that right?
If you have a local bank that allows foreign depositors to exchange at 0.3 JPY/1 USD, does that mean you pay about $2.50 to convert 1000 USD?
OTOH, if you are even at 5-6 figures regularly you start paying attention to all the fractions, and bit more pain in the ass interface is fine. At one point I used to do this directly with a FX desk which was a bit fiddly but saved me a bunch over a few years.
Stellar blockchain is trying to do something innovative in this space but is slow to get volumes.
In Australia this became illegal at some point. Maybe 10~ years ago. I believe the specific regulation was something about the fee must represent the cost associated. And obviously, the bank doesn’t actually incur any cost to reject a payment. Most definitely not $35 worth.
But they could argue they incur some cost related to a negative balance. They’re lending the customer money. So CommonwealthBank (CBA, major bank, and likely many others) gave everyone a $500 over draft on their “checking account” (colloquially not referred to as “checking” in Australia).
So now your account didn’t go negative, or reject payment. Overdrawing your account was a feature, and you paid for it.
Having an overdraft feature was free. You were charge a fee each month based on how much you used your overdraft, plus interest if you carried a negative balance. 1-100 of overdraft was $9. The full 500 was $27 or $35.
So effectively they reimplemented a very similar fee structure as a product.
While the outcome was similar, this feels a lot less scumbagy.
It's always been opt-in, you have to enable it for your account.
I think what may be going on is that "financial innovation" is being used to refer to different things. I think when people say "financial innovation" is negative, they're referring to "high finance"/Wall Street type stuff like CDOs, but this article mostly talks about retail bank accounts.
I am also under the impression that much of "high finance" is problematic, the industry seems to be often parasitical and rife with problems such as insider trading and market manipulation.
(1) Americans expect to be able to get 30 year mortgages at rates around 3 percent;
(2) Americans expect to be able to invest their retirement savings in stocks and bonds with a long term rate of return of 8 percent or more.
These two facts make no sense when put together unless somebody is putting a massive thumb on the scales somewhere. In a free market such a situation would be impossible, because nobody would have any incentive to lend money for 30 years at 3 percent when they could just invest it in stocks and bonds over the same time horizon and get 8 percent.
Afaik, the successful tying of the consumer investment (and especially retirement) account to the performance of the financial market (rather than to the parts of the market that manifest themselves in more physical ways) has created a situation where any large-scale decision that might improve the material lives of Americans but would harm the 'market' (via lowering the value of the USD or certain fund share prices) has become untenable.
Millions of voters can be controlled by trotting out "never hurt the market because then what will happen to your investments?" whenever something interesting comes along. I'm certain that the enormous subsidization of the housing market and the associated treatment of housing as a primary investment vehicle for those same voters is related.
The difference is now you have millions of amateurs with small sums versus a few hundred professionally managed institutions. Either way, the little guy loses.
The 401k has served as a clever trick to get large numbers of laborers to support policies that mainly benefit rich capitalists and to oppose many policies that would help themselves.
I don't think those things are synonymous. You can have mortgage securitization without CDOs.
IIRC, the issue with CDOs was they were used to "innovatively manufacture" "low risk" investments out of high risk assets. They were so complicated that sophisticated professional investors lost track of the underlying situation, made decisions based on a flawed model of them, then got caught with their pants down when their model failed.
I'm skeptical because it was CDOs that blew up, not more typical mortgage backed securities.
I think the key phrase there is "can be." Complex software can be reliable, but it also can be a buggy mess or reliable except for that one bug that literally kills you. The complexity creates a situation it too much trouble to really understand it, so people treat it as a black box and just hand-wave and believe whatever they want. It seems CDOs had a similar problem, while perhaps regular MBS are simple enough that they don't.
> the industry seems to be often parasitical
Most industries are. Oil, Pharmaceutical, Weapons, Government bureaucracy, etc... The list is really long. I'd say that Finance is one of the most regulated areas; but you are unlikely to notice other rip-offs (ie: oil leak that cost the tax payer and the citizen)
> Most industries are.
Yes. Are you defending the issues in finance because of this? That this means that corruption and insider trading are ok?
This is unfair, do you have complete model of how the world works while basic questions in economics remain unanswered, like how exchange rates work, how growth works of even on the nature of money?
"There is little agreement on a definition of money or what assets serve as money, much less on the nature of the private and social costs and benefits of a money economy"
Even if we fully understood impact of financial policy, this is a political topic and requires involvement.
It's far to easy to deflect criticism by pretending that the finance system is like a well-oiled machine, carefully put together, all pieces humming in harmony, and the plebs shouldn't meddle with it.
So cool now that we actually have a fully distributed and digital form of money. So much innovation is happening right now to explore all possibilities of this new capability we have.
Already moving Bitcoin compared to an ACH or Wire Transfer is night and day. Much faster with no limits or constraints, or even having to pass money through a bank as an intermediary step.
54 other countries already have instant payment systems, and utility priced (ie very cheap) instant payment infra is the innovation. America is just catching up the the developed world, financial services speaking. After deposit accounts and instant payments are solidified, the remaining innovation is…lending (securitize all the things, real estate, autos, factoring, float, etc).
The remittance cost piece was spot on though wrt to Wise. Surprised we haven’t seen more copycats, but it turns out culture and management are the hard parts, not the tech.
On the flip side if you need an example of stifiled innovation with no near future improvements on the horizon, just look at Canada's pathetic excuse of a banking system.
 ACH is private institution started as better clearing house between banks, unlike systems like Poland's ELIXIR which is under aegis of polish equivalent of Fed
I have had "free" banking for over 20 years, by going through credit unions instead of banks. Credit unions are identical to banks, with the exception that they are (usually? always?) non-profits and generally do not charge fees for having an account. There are limits on withdrawals, transfers, and fees for things like wire transfers that do not affect the average family. They also have some condition of membership but these days, living, working, or going to school within their service area suffice. Almost every area in the US has a credit union. There is no reason to open an account at a commercial bank. Every time I have opened a checking account (for temporary business purposes) at a bank instead of a credit union account, I have regretted it.
Now, overdraft protection fees. These are a completely separate topic that is applicable to both banks and credit unions. These are completely optional, by law. If you have a habit of regularly withdrawing more than you deposit, you can call up your bank/CU right now and tell them to take it off of your account. The tradeoff is that your checks will bounce. Either way, the solution is simple: Keep track of your balance and don't overdraw.
The author also thumbs his nose at paper checks, but most traditional small businesses in the US don't have much of a choice: checks are how money moves because they leave a paper trail. Which is important because the security of the whole US banking system is based on after-the-fact audits. This is a double-edged sword because while it allows (some kinds of) fraud, it's also easier to clean up. If someone steals Gradma's check book, most banks will bend over backwards to help her because they want to keep her as a customer. If someone steals Grandma's bitcoin wallet, she is just simply fucked and that's the end of that.
I agree that the ACH system is largely a dumpster fire, though.
It would be more fair for everyone to pay the same for a service, but banks decided it was "better" to get 10% of the population to pay for it.
FWIW "overdraft fees" and "overdraft protection fees" are two different things. If you do not sign up for "overdraft protection service", then when a check bounces, your account will generally get charged an "overdraft fee", and the person trying to deposit the check will generally get charged a similar fee for the checking having bounced. Hence businesses (that still take checks) having notices about passing their banks fee back to you if you write them a bad check. If you try to use your debit card, the card will be declined, since it is an online transaction.
If you do sign up for "overdraft protection service", then the bank will extend you a small line of credit. When a check would bounce, the bank will honor the check but charge you an "overdraft protection fee". This fee is usually the same amount as an "overdraft fee" would have been, but depositing the check will have been successful, saving the fee on the other side. However, I think that such services tend to also apply to debit card transactions, so if you swipe your card and overdraw your account, the transaction will go through but you'll get dinged with that fee.
Whether it benefits you to sign up for such a service will thus depend on your expected usage and the banks specific terms. Which back to the general point about banks attempting to create revenue by nickle and diming customers with an arbitrary fee structure - this is just another facet you need to know about to avoid them. I've never paid a monthly or punitive bank fee in my life, so I started off a bit skeptical of the article. But I've still had to deal with the existence of such fees, whether by double checking transactions, making sure to keep a minimum balance, or having to get management to remove erroneously assessed fees. The increased share of large online-only (or online-first) banks has created a good amount of competition that has driven the prevalence and dollar amount of such fees down.
FWIW last time I did a comparison of the large online banks, I saw that Capital One has an (optional) feature whereby if you overdraft your account, it's treated as a regular line of credit with a reasonable interest rate and no fees. This is probably the best option for someone concerned about regular overdrafts. The trade off is that their customer service sucks.
If you think your banking is free just because you don't explicitly pay for your credit card or your checking account you are seriously deluded.
Banks have injected themselves into the stream of payments for goods and services and are now getting cut of almost every your transaction. They have architected entire process very cleverly so that you, the consumer, do not need to be aware of the amount of money you are paying and the merchant, service provider has no way to protest.
It makes sense for them to reduce the visible part of the cost to 0 just to get you lulled into sense of everything being free. Banks want you to think so. Most people are inept at how banks are making money and for banks this is how they like it to stay.
In reality, you pay hefty tax on every purchase you make with a credit card which is costing you way more than you would accept if that sum was to be paid in monthly installments.
I have been working for banks and credit card companies for the best part of the last two decades.
Tradfi is barely struggling to keep up with a rapidly inflating fiat. The tiny interest being paid is no incentive to keep funds with the traditional banks. We don't need banks to hold that dirty fiat, we need digital, tradable, state-intervention and censorship resistant assets we can custody and try hold on to some value.
I went to an African un-recognized state in 2009 and people already were using SMS-based mobile phone money transfers to conduct daily business or send money to their contacts. I also live in the Nordics.
If a country with an advanced national ID system and a developing country with barely a government could both leap into the next generation of personal finance, what took the US so long?
If I built my house 20 years ago, it would be up to date as of 20 years ago. Someone who builds their house today would have a house up to date as of today.
I can update my house to be up to date now but it’s going to cost a lot of money on top of the money I already spent building the thing. I might wait another 5 years first so I have the improvements discovered in the next 5 years.
You can’t be constantly up to date. It’s too expensive. You have to up to date in cycles.
I'm also sure that in 2009, there was population the size of the Nordics that was using mobile payments in the US, but the US is a large place.
A colleague of mine years ago told me a story about check clearing in the "old days". Northern Trust in Chicago handled a large percentage of check clearing for the entire US. Their back office building had a heliport because they had a twice-daily cargo flight from O'Hare filled with all the checks that needed to get cleared. I almost feel like the batch processing was because of the scheduled delivery of the physical checks to these processing centers around the country.
Those who say there is no innovation simply haven't looked deep enough, everyday i see cool new ideas in crypto, infact today I saw a 'streaming payments' service, so you can get your salary streamed to you constantly as opposed to a monthly payment - how cool is that?! Love all these ideas! Seems things move faster in the crypto space, as people are less concerned with formalities and processes. Sure this will lead to some big failures, like the occasional defi hack, but it also leads to brilliance in some areas, so to just say 'there's no innovation in crypto' is complete ignorance imo.
Enjoy prepping your tax returns :3
There are entire classes of financial instruments in use today that could not exist in the tradfi ecosystem. Pretty sure that's "financial innovation".
Of course you can create a simple service that ignores all those rules and it'll be cheaper.
The difference between fintech and traditional banks is that former treats tech as revenue driver and latter as cost center and it feels in literally every step.
I see a few comments saying "this is stuff the rest of the world has had for a while now."
That's probably true to some extent. But it undersells the value being reported on, because the US market is a valuable one.
'Surprise! The richest, biggest economy in the world had banking/financial systems that were inefficient in X, believe it or not -- but that's in the progress of being fixed, which means Y is now more possible/profitable.'
You want innovation? Regulation mandating open APIs among all the banks would be unleash an innovation tsunami. Don't believe the propaganda, regulation is essential for competition and innovation.
I agree the US is also a big country and has made lots of efforts to bring banking to every citizen.
India, though quite far from having at least one bank account for every single citizen, is leaps and bounds ahead of most other economies in terms of fintech and innovation in the field of mass banking.
Be it, the post office savings account scheme, way before banks had moved to computers, or the current wave that's happening with UPI and the aadhaar ecosystem.
My point is, if you want to read about financial innovations brought by technology ("fintech"), read about things happening in India (and also China).
EDIT: Like paper cheques, I didn't have to use those in my 30 years in Belgium prior.
I'm close friends with a relative of yours who has worked for several major space companies, and we talk about your writing pretty frequently. Your articles on salary negotiation, life in Japan, and how to build side projects have proven extremely consequential for both of us--thank you so much for putting your thoughts down as frequently as you do.
Do you think dramatically increasing the speed and lowering the cost at which people can participate in financial transactions (as appears to be the mission of Stripe and the overall theme of your post) will have any effect on the current astronomical prices of small-scale international shipping? The costs involved in international financial transactions and international shipping for small customers seem to be closely coupled, but I'm not entirely sure how.
Logistics like international shipping are both a financial infra problem and an infra infra problem. I do think that the cost of small-scale shipping is going to come down to approach the ratable cost of volume in a shipping container (which, as you are aware, it is orders of magnitude higher than now), which will likely come from improvements primarily on the infra infra side.
Two companies to keep an eye on in this stack are Flexport and Shippo, among others.
From POV of EU citizen (though extra biased due to Poland just using IBAN numbers), international payments are pretty fast - personally the biggest issue is when I need to figure out IBAN/BIC codes because receiver doesn't know them. Payment for SWIFT transfer and currency exchange can be still annoying, which I mitigate by having currency accounts, but still not as big as it could be.
I'm still waiting to see an identically flexible account for personal use, not just business, though.
The fact the author sells this as innovation speaks volumes about the usual treatment of people deemed (near-term) useless to the (US) apparatus.
This is real change enabled by technology and brought about with really stunning cross-functional collaboration between some really good techie volunteers and bureaucrats behind the scenes and politicians through appropriate regulation, good consortium partnerships and just really good timing luck.
This is a really great point which had never occurred to me.
Free current accounts (as we call them in the UK) are the norm. We had - or still have? (I haven't kept up) obscene overdraft charges too. If my memory serves me right, people paying £10-40/mo in overdraft charges wasn't uncommon. I feel our situation is/was even worse because free accounts were the norm.
When paid accounts did get introduced, but they came bundled with things like extra interest, insurance etc, so you kind of broke even (not so much now).
Hmm. I'm not sure I agree. I'd say instead that most people are doubtful that financial institutions are playing nicely, and/or that "fairness" is increasing.
It's one place where there's a huge gap between the average voter and either major US party's platform, and certainly between the average voter and actual laws & enforcement. It's why a certain lately-prominent political figure made the tactical decision to ignore their party's platform and court voters directly—and it worked.
Seems one of the biggest hurdles for US banking are the guard rails on financial products. The ability to pull back funds and reverse transactions creates the excess fat that keeps banking expensive and processes slow. 'Get paid, stay paid' as seen in blockchain, resolves this.
A key difference here is that if you screw up your payment in Thailand, you have legal recourse to reclaim your funds. If I fat-finger my rent to the wrong Khun Somchai, and he thinks he wants to keep it, I can use the legal system to get the money back from him (and he knows that), and what's more I know full well that his bank will know who he is and where he lives.
If I send money to the wrong Bitcoin address, nobody can help me with that.
Bitcoin addresses are anonymous. Sending to the wrong address is not sending to a wrong KYC bank account. There are no mechanisms in place to rectify that with Bitcoin, which is a bug, not a feature.
Third party escrow isn't unique to bitcoin, and on top of not being competitive can be painful.
The legal systems are pretty important pieces of technology that solve real practical problems.
> If I send money to the wrong Bitcoin address, nobody can help me with that.
Bitcoin is a bit like introducing an electric car without seats, seatbelts, or a windshield. Sure there's some innovative bits there, but the hype forgets it's missing very important features. It's even more astounding that the hype men sometimes try to spin the lack of those features into a selling point.
For the victims of, say, Madoff, the ability for the authorities to intervene was very much not "excess fat".
Think of credit card fraud and the $25 billion lost to it every year(half a Madoff). Then countless start ups, engineers and customer service employees that all deal with the excess fat of correctly routing payments. All these resources to put guard rails on a flawed process, funded by the 3% skim off the top.
Blockchain for finance demands high user accountability, a refreshing change for anyone who's been on the other end of a reversed payment.
Yet again: I would like to see a defense of cryptocurrency that doesn't require me as a precondition to subscribe to the policy positions of the Mises Institute.
Plaid is a billion dollar web scraper and privacy violater that works around this omission.
Like health insurance business transactions, there should be mandatory standards for both the data structures and operating rules for such an API as well. (But they should not be as horrible as the standards and operating rules adopted for healthcare.)
Curious what the HN crowd thinks about this ... was this a good or bad thing?
And tech brought us a lot of "innovations" such as silencing organizations and punishing sex workers via defunding