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> Many businesses incur costs to third parties that could be reduced or eliminated by trustless systems The way you phrase this it sounds like a marginal reduc

by krrrh 9y ago

> Many businesses incur costs to third parties that could be reduced or eliminated by trustless systems The way you phrase this it sounds like a marginal reduction of costs, and maybe a marginal reduction in the auditor workforce. That’s great, and it will bring about some efficiency in the businesses it applies to, but it doesn’t sound like a story of transformational change and an unlocking of new value. Even in the worst case scenario, how big are auditing costs to a business?

thatthatis 9y ago
moving electronic payment cost from 3% to 1% is a marginal reduction, but if we get that reduction across a few trillion in transactions it becomes real money. Unfortunately, a lot of the cost of the 3% is providing fraud and chargeback protection that lets customers be comfortable paying online. So, while it's conceivable that a stable block chain based payment method could revolutionize ecommerce payments, the present incarnations have trust math (before we even begin to discuss volatility's effect on suitability of a medium of exchange)
- krrrh 9y ago
  GP was talking about auditing costs at financial institutions which is a different issue than credit card transactions (I think). Another portion of that 3% cost is marketing in the form of cashback and rewards points which can be eliminated if the market or regulators demand it. In Australia they capped credit card fees to around 0.5% on the basis that the fees were a market distortion. They review them regularly and have suggested that lower fees are appropriate [1]. It doesn’t actually cost Visa that much to handle transactions, and there are proven solutions to fixing credit card fees if that is what is desired. [1] search document for “cap” http://www.rba.gov.au/payments-and-infrastructure/review-of-card-payments-regulation/conclusions-paper-may2016/interchange-fees-and-transparency-of-card-payments.html http://www.rba.gov.au/payments-and-infrastructure/review-of-...

by krrrh 9y ago

thatthatis 9y ago

moving electronic payment cost from 3% to 1% is a marginal reduction, but if we get that reduction across a few trillion in transactions it becomes real money. Unfortunately, a lot of the cost of the 3% is providing fraud and chargeback protection that lets customers be comfortable paying online. So, while it's conceivable that a stable block chain based payment method could revolutionize ecommerce payments, the present incarnations have trust math (before we even begin to discuss volatility's effect on suitability of a medium of exchange)

krrrh 9y ago
GP was talking about auditing costs at financial institutions which is a different issue than credit card transactions (I think). Another portion of that 3% cost is marketing in the form of cashback and rewards points which can be eliminated if the market or regulators demand it. In Australia they capped credit card fees to around 0.5% on the basis that the fees were a market distortion. They review them regularly and have suggested that lower fees are appropriate [1]. It doesn’t actually cost Visa that much to handle transactions, and there are proven solutions to fixing credit card fees if that is what is desired. [1] search document for “cap” http://www.rba.gov.au/payments-and-infrastructure/review-of-card-payments-regulation/conclusions-paper-may2016/interchange-fees-and-transparency-of-card-payments.html http://www.rba.gov.au/payments-and-infrastructure/review-of-...