I was already immensely concerned over the cognitive hold on millions of Indians by WhatsApp, financial data and debt makes it even worse.
When all it takes is a single forward from your WhatsApp uncle/aunty to undo all the rationale induced in the vulnerable members of the family to protect them against COVID-19, it should be treated the same way as a security vulnerability on a platform is treated; only in this case the vulnerability is limited attention/cognitive biases of the users, nevertheless it's the platform which enables it to be exploited.
I appreciate the steps taken by WhatsApp to limit fake news & misinformation such as limiting forwards; but it is certainly not enough. They need to implement aggressive detection, reporting and banning mechanisms for those who spread even a single misinformation/fake news.
I don't think it's the Engineering effort which stops them from doing that.
> They need to implement aggressive detection, reporting and banning mechanisms for those who spread even a single misinformation/fake news.
Two issues with this:
1. This is simply not a realistic standard in India, a nation which lacks the basic level of education of many Western nations. While this is true of a few people in most nations, and while many citizens can't be bothered to check, it helps if some at least have the background knowledge to do their own fact-checking rather than just taking the word of one person over another.
2. The "who decides" problem, best illustrated by yesterday's removal of the medical opinion of two front-line doctors from you tube because it "contradicted WHO recommendations". One man's "fake news" is another man's "front-line reporting".
>This is simply not a realistic standard in India, a nation which lacks the basic level of education of many Western nations
2016 US elections showed western education doesn't help much in defending against misinformation campaign.
I'm not denying that filtering fake news is going to hard, but when people are getting killed directly as a result of fake news from a platform[1], democratic process are undermined by misinformation campaigns, everything which needs to be done should be done.
As for YouTube moderation policies, at least there are some policies which we can debate upon.
Now I'm somewhat curious whether you don't consider misinformation to have played a role in those elections or whether you don't consider the U.S. an example of western education.
Show some evidence that the misinformation actually had a significant effect. I know it’s been widely discussed, but I haven’t seen any significant efforts to quantify the impact.
Interesting. WhatsApp currently has no business model. No ads. The app is free. This can be an interesting area to charge users some real money. In India, WhatsApp is already huge -- 400 million users -- so they have a reach that is unparalleled in the world's second largest internet market. And largest open market.
WhatsApp's main business model is to infer relationships and social graphs on behalf of Facebook, since people trust WhatsApp with access to their contacts even though they might not trust Facebook.
I am in this group and recently my phone had problems. Moved to an older phone that was within the house. Decided not to give WhatsApp access to my contacts. The same is now basically as good as useless. I can't start a conversation with anyone unless I am replying to a previously shared with message. There is just no way you can input a contact into the message which is certainly a clever way of inferring the social graph. Well, now I am just about to give in to them.
I use this link which will open in WhatsApp by default to send a WhatsApp message to someone who is not in my Contacts and don't want to add to my Contacts just to send a WhatsApp message.
It will be a pain in the arse to use for all your contacts and probably not worth the effort as if you use WhatsApp regularly (for an Indian there's no way around it) you will have sent a message to almost everyone on your contact list at least once and Facebook will know about it rendering the whole thing pointless.
If you're on Android, you could consider using the Shelter app to create a separate work profile for WhatsApp to live in. WhatsApp will then only have access to your work contacts (and work files etc.)
So then you can at least minimize the number of contacts you expose to WhatsApp to the number of people you're actually in touch with regularly over WhatsApp.
I think it is pretty smart idea. Facebook has recently bought a 10% stake in India's large Telco , JIO. Speaking of risk, Jio is very (horribly) efficient in invading cutomer's privacy as they are datamining literally everything and also oushing in-your-face-advertizing-inserts. Facebook is also equally (horribly) efficient in data mining. So using this data from millions of consumers, they could lower the risk of default. The current default rate for microfinance in India is 2.9%. ( https://www.equifax.co.in/about-equifax/press-releases/-/blo... ) . They could easily reduce this rate using this data. So yeah -- tihs will be really profitable.
Someone should come up with a lending service where they lend you money and you never have to pay back. Instead they make a profit by collecting funding from investors. I think such a service would be very popular.
> But the local payments body has removed most of the fees they could levy on banks and merchants to make money. The move has resulted in firms exploring other financial services, such as credit and insurance and target merchants to make money.
Ah, unintended side effects that leave citizens worse off at work once again...
Loans could be fine if done properly but the idea of tons of financial tech companies being forced to push loans hard in order to offer their original and far more stable business model swept from beneath their feet is worrying.
How does that leave citizens worse off? Removing charges from payment makes that comission go to citizens, small businesses and away from the pocket of big corporations. The fact that big business can't make money by charging for payment is not worrying. If the credit offering are not good for citizens, regulations will fix that. Government shouldn't allow everything in the fear that big business will do something even worse.
Of course the citizens will like that its "free" but that doesn't make the costs of operating the financial networks also suddenly free.
Nor is it guaranteed the loans will be feasible enough business to cover expenses for the primary financial networks... Let alone covering any sort of customer service, help fighting fraud and theft, or to invest in expansion to new markets, or improving their software products, cover their own banking fees and insurance risks, pay their workers a decent salary, etc, etc.
The government basically limited access to a potentially massive marketplace that would do wonders for the wider economy, increasing efficacy and benefiting local business (India's economy is terribly inefficient and littered with rules that change every region), and instead of charging for the actual service they are providing they will be forced to push a bunch of debt onto the communities that they don't need (or some other shady monetization strategy like selling data and advertisements or other stuff that may even hurt the original business).
This will also likely further limit the market to a monopoly as it requires massive scale to get the <1% who might have loans, so they can get good enough deals with the banks to lower their own fees to have survivable margins. On top of the main business expenses.
Monopolies are famous for being extremely anti-consumer but still surviving with little competition because they are the only ones big enough to navigate the countless legal, regulatory, and technical hoops required.
Destroying the most basic business model... Even before the companies get off the ground (article says the gov still
only granted access to a million customers) sounds like a terrible idea.
Who knows how much the fees could have declined from competition alone? Or whether anyone will even continue investing in it if no model exists.
Just saying the government can write even more rules around the debt will make all problems go away is very naive. Unless your end game is gambling all the pieces will come together before it all crashes or the government running it themselves and/or let taxpayers cover the losses?
Every single bank in India offers the exact same free payment service (UPI based, which these big co apps are also using, identical in functionality), and that is free just like other bank based free payments. So even if all the bigcos leave India payment market, it won't make any difference at all.
>and instead of charging for the actual service they are providing they will be forced to push a bunch of debt onto the communities that they don't need
This is an absolutely ridiculous argument. Your argument boils down to "Government shouldn't stop bigco from doing anything bad, as then they will be forced to do even more shadier stuff".
>Destroying the most basic business model... Even before the companies get off the ground (article says the gov still only granted access to a million customers) sounds like a terrible idea.
This argument is wrong. First of all, WhatsApp was not granted access to all customers because they said they weren't ready to interoperate with others, i.e, whatsapp users couldn't pay google pay users. A fundamental requirement of UPI is interoperability, so regardless of which app you use, you can pay anyone on any app. This can be avoided if you are in testing stage, like WhatsApp was, but then your acesss is not to all customers.
> Who knows how much the fees could have declined from competition alone? Or whether anyone will even continue investing in it if no model exists.
The fees are zero via any bank app. I don't see how a bigco can ever offer lower fees than the providing bank.
I've been keeping an eye on services After Pay in Australia for years. I often thought about rolling it out in Nepal and other developing countries and then I stopped. I came to the conclusion that there is an even greater amount of risk in countries where such credit is not normally available, a huge lack of capital for most people and families is the norm and decided that this would be a predatory practice. So I stayed away.
With everything happening right now, it's incredibly irresponsible for such a product to be released in a market that is unprepared to deal with the consequences.
Starvation for many families who would avail of this service is a fact. Many have come out and said that they will probably starve long before they contract any virus. Scary stuff. Shame on Amazon and shame on Facebook!
You're saying that an entire country doesn't deserve a new credit service because of a lack of existing credit services in that country.
1. You're ignoring middle class and well-off people in those countries.
2. Access to credit is important for developing economies.
3. Access to credit doesn't imply predatory lending, that's a separate problem in how the creditor runs their business.
I know that this service will be abused by those who need quick access to capital and it will ruin many of their lives. I don't support payday lending either, doesn't mean that it's illegal but it sure is unethical to charge high interest rates on low sums.
Amazon has said this is rolling out (only) to "eligible customers", so it may be restricted to the middle class.
The people that are facing starvation are not Amazon customers in the first place; they are mostly migrant labour that doesn't have a fixed address, or they live in remote areas where Amazon does not deliver.
Also, we don't know what the interest rates are, as yet.
Not to defend loan sharks and usury, but the moral conundrum is always interesting. There isn't really any winning here, because if you fail to ethically offer credit products, you're not actually destroying the market demand nor how it is filled. By that I mean you'll get payday lenders and if you don't get payday lenders than you get criminal underworld loan sharks. We take access to credit and the way it smoothes things financially for granted, but not everyone has that luxury. Starvation for many families who don't avail of that service is also likely a fact. Starvation as a result of the second order economic fallout of this pandemic across much of the global south is certainly a fact. Saying shame on Amazon and shame on Facebook might help you feel better, but what's your alternative?
there's credit available, just in the form of loan sharks or third tier and above lenders with predatory practices already. very common in developing countries and hard to stamp out but demand is there.
Those are on a much smaller scale though, and their target market is mostly formal-sector, whereas Amazon and WhatsApp's initiatives seem to be aiming much wider.
The general risk profile of people is increasing due to job loss in the current pandemic. Is it a wise time to launch a money lending feature right now?
If I were an investor I'd be worried... from a humanity point of view, I'm cheering this, in the developing world the governments aren't helping enough (some would argue, "It's the same in the developed world!") and day-wagers are probably going to starve to death[1]. A sudden line of credit would be a boon to help them survive.
But since a capitalist came up with this, it would not surprise me if the loan terms are horrendous and basically means they will be loansharks with slaves trying to pay off the loan in the future.
>> day-wagers are probably going to starve to death[1]. A sudden line of credit would be a boon to help them survive.
If day wagers stay out of work how can they possibly earn the money or interest required to pay the short term loan? Most day wagers have already exhausted their savings. Debt on top of debt usually means starvation in these countries.
Well, a humane billionaire would just set very low interest and repayment terms of "when you can". In the end it would just be no different to charity. I wonder what's better, donating to the Indian version of food banks, or giving them money so they can buy food.
There are (were?) already microcredit websites where people in the developing world place loan requests like "I need a $500 loan to start a little shop", and a bit like Kickstarter, you can give them the loan, but also you accept this shop idea might not work and they would default on their loans -- and the site tells you this, so from your point of view the loan would become charity.
Yeah, not the fault of the person who submitted the story, which is fairly informative. I'm assuming one of the moderators would fix it when they see it.
Yup, never meant this to come across as assigning a 'fault', was just pointing it out, as I was interested in the headline and then suddenly it stopped ;)
They hand it over to a local debt collector agency or whatever the local procedures are. Maybe they call the bank and take it out of the persons next pay check.
I disagree that it is a jobs issue. It is a legal issue and what procedures exist for these situations.
The debt gets sold to local companies that can attempt to enforce it in that province/town, probably for cents on the dollar. It probably gets sold to an aggregate and then collectors bid on it.
Not too different than what happens anywhere in the world.
The idea of lending in our current financial system is stupid. Just stupid.
It's like investing in a business except with almost all of the downside if they do poorly and very limited upside if they do well. It's a deceptive economic tool for social control, that's all it is.
The economy would be way better off if we just illegalized lending. Especially lending by banks.
Well, it entirely depends on the type of lending. As long as the borrower uses that money to boost his income everything is fine. Car loans are a pretty good example of both wasteful and useful lending. You can drive to work with your car even if the workplace is far away. However, using a loan to buy an SUV or pickup truck doesn't increase your income beyond what you get with the economy car.
I'm a millenial. I already can't afford a mortgage. How will that change anything?
But if they ban lending, it would cut demand to buy properties and would cause a price crash. Then within 5 years, I would be able to buy a house with cash.
When all it takes is a single forward from your WhatsApp uncle/aunty to undo all the rationale induced in the vulnerable members of the family to protect them against COVID-19, it should be treated the same way as a security vulnerability on a platform is treated; only in this case the vulnerability is limited attention/cognitive biases of the users, nevertheless it's the platform which enables it to be exploited.
I appreciate the steps taken by WhatsApp to limit fake news & misinformation such as limiting forwards; but it is certainly not enough. They need to implement aggressive detection, reporting and banning mechanisms for those who spread even a single misinformation/fake news.
I don't think it's the Engineering effort which stops them from doing that.