> I'm not even going to read it because it is pointless.
Reading it would’ve saved you the embarrassment of making a comment that effectively retreads the actual article in its entirety while also painting yourself in a negatively arrogant light.
This ain’t Reddit. RTA is advised before commenting.
Well no, as a consumer you need to feel comfortable that you know how to get your money back if there's a problem with your purchase, as a merchant you need similar protections and a stable cost model, and as a bank you need an income model to cover all the costs and risks associated with processing the transaction. Moving the money is the easy part and is not the main set of problems that the card payment schemes have solved.
I've never understood this insurance defense of high payment card fees (percentages instead of flat fees).
If it is a truly valuable insurance for the shoppers, why is it not opt-in?
My anecdotal experience from EU is that no-one even knows chargebacks exists or how it works and if this was turned into a transparent honest insurance, prompted via a question on the payment terminal/online checkout such as "Do you want to pay 1-3% to insure this purchase?" the vast majority of people would click no on the vast majority of purchases because there is already inherent trust involved between the merchant and the shopper.
Now add the chargeback pains that merchants go through for credit card frauds and you have what appears to be a sickly system where both shoppers and merchants lose, with the only winners being visa/mastercard & the acquiring and issuing banks they cooperate with.
If I buy a burger from a restaurant and its bad, i tell all my friends and i don't go back. I don't need insurance.
If I buy a service on steam, i already trust valve fully for those smaller amount sizes, I don't need insurance.
My gut feeling is that >99,9% of purchases made via payment cards are not relevant to insure meaning following the simpler risk model of cash for those would work just fine.
Chargebacks are indeed quite detrimental to merchants as they are the ones paying it. And if you have bad customers(maybe competition is trying to put you out of the business), you might get deep into red quite fast. Usually it is anywhere between 20 and 50 euros, which is crazy when it is just a reverse of the bank transfer which is the tech in the background. Like if you run a small online store and you sell 10€ items where you make a 5€ pre-tax profit, having a 20€ chargeback on such sale can be really dangerous.
There is no difference to the bank transfer(as that is what all of this is just wrapping inside). If you are paying with a debit card, you have the same "protections" as basic bank transfer. And from personal experience, the bank is near useless and you won't be even able to call your card company.
On the other hand, credit cards are something else. Those are essentially short-term loans that are insured. As there are many parties involved that profit from you use of these, there indeed is a lot of protection in this case. But credit cards are very niche part of online card payments and mostly it is a USA thing.
> Moving the money is the easy part and is not the main set of problems that the card payment schemes have solved.
Nailed it. Anyone can move money.
As a consumer, I always opt to pay for credit card where available. The safeties provided to me facilitated by everyone in the network – from issuer to acquirer and everyone in between – is exactly why. I don't want to consider waiting 12 months in line at small claims to get back $200 sent over Interac for services that were never provided by a shoddy business owner.
The cost of those consumer safeties and convenience is incurred by the merchant. This is the cost of business.
When you buy something from Amazon, who protects your purchases, Amazon or the credit card company?
This "insurance" could be offloaded to a neutral third party that isn't controlled by the credit cards. Often, you purchase additional protection insurance on your big ticket items. This could easily be extended to cover whatever credit cards would have been relied upon in the past.
> This "insurance" could be offloaded to a neutral third party that isn't controlled by the credit cards.
I had not considered this. My first thought is how technically and operationally complex it would be for an insurer to underwrite these transactions "on-the-fly" from merchants they don't know, but it is probably a great idea.
lol you’re being very dramatic, it could absolutely be done in a garage. Legacy orgs are held together with billions of dollars worth of last minute fixes and duct tape in the US
since I've founded banks over here in Europe, I can tell you: NO! Thats nothing that you could do in a garage :)
Even a PSP requires some "minium/fixed setup" on different layers in the org, so building this with two people over your spring break will not be possible.
Bitcoin is not the only currency. There are quite a lot of decent networks who offer quick transactions with almost no fees and is not a speculative currency
Tokenized bitcoin is actually perfect for this. Bitcoin is otherwise, a useless pet rock and if you follow my comment above, it makes it useful, while also removing all the ESG arguments against bitcoin (because tokenized bitcoin is on eth and eth is PoS).
I never mentioned bitcoin and you are missing the point here. Cryptocurrency network is just a publicly available distributed ledger that records "financial" movements, these movements are denominated in the inherent cryptocurrency of the network. They are just units of measure but they themselves do not store any value. The world needs to start actually using crypto for payments, so you can exchange FIAT or precious metals for a crypto coin and then use it to buy groceries. It is just a means of exchange of value, not the value itself. The fact that people take it as store of value should necessitate a nee designation beyond the "retard" classification.
> I am no fan of crypto as today it is being used as store of value(which it is not) instead of mechanism to transfer value(which it is). Once we finally move into the right direction, I know I'll have a good day.
People need and like to use credit, but they are doing it wrong by contributing to the "rotten" system. Crypto is a great store of value because you can use it as collateral to borrow against. Supply eth, borrow usdc, withdraw as usd. This is tax free since the conversion is 1:1 and there are no gains to report.
Instead of buying things with a credit card and paying it back every month, provide crypto as collateral, borrow against it and then pay it back. The difference is that this takes an upfront investment in order to get yourself started. Not too much different than the way credit works in SE Asia, since they time lock a deposit, to enable a debt card.
Maintaining your collateralization ratio (this answers the price volatility question) is no harder to do than paying the exorbitant fees to credit card companies for your balance. This could easily be wrapped into a nice UX. It would work globally and enable all sorts of great commerce. No more giving up all your information to the credit card companies. No more credit scores to get hacked either.
You're solving for the completely wrong problem. Several wrong problems, actually.
Your scheme is just debit cards with more work, less privacy and a lot more risk.
Consumers use credit cards because of chargebacks and fraud protection. If I get my card stolen or I accidentally pay a fraudster, I get that money back.
Crypto's irreversibility is one of the worst things about it from a consumer perspective. It's also horrible for privacy since all your transactions are literally public.
Amazing to watch someone try to argue FOR credit cards. Maybe you work in that industry. ;-)
> Consumers use credit cards because of chargebacks and fraud protection.
True! However it isn't your credit card that protects you with purchases from Amazon, it is Amazon.
I use my credit card for all sorts of things, because it is just convenient. Do you expect to do a chargeback at a grocery store or gas station? No. But, what you're giving up for that privilege, is all of your data.
> Crypto's irreversibility
In what I'm talking about, this part is irrelevant since you're just paying with cash.
> all your transactions are literally public.
You actually believe that credit card transactions are private? LOL. They are sold to the highest bidder.
You don't need to like something to understand it.
And no, credit cards protect you from the merchant. I can call up Capitol One and get them to do a chargeback if I order something online and the merchant never sends it.
It highly incentivizes the merchant to help you, otherwise the only recourse would be to take Amazon to small claims court.
> You actually believe that credit card transactions are private? LOL. They are sold to the highest bidder.
You misread it. Your crypto purchases are public. Literally. Yes, your card purchases are compiled and sold in aggregate, but the entire blockchain is available to anyone.
It's an utter myth that crypto is private or can't be tracked lol
This has _nothing to do with dodging taxes_. Everyone, including me, should pay their taxes within the rules of law. Do you pay taxes when you "borrow" funds from a credit card and pay them back every month? No.
This is really no different except that instead of borrowing from a third party, you're borrowing from yourself. In the same way that you don't pay taxes when you borrow from a bank or when you borrow from your friend. Cut out the middleman and be your own bank.
My prediction is that one day, people will think of crypto as the traditional finance system. We're already seeing the transition happening today.
