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I applied to YC to bring this idea to the US (rejected). Credit cards are our primary form of digital money and their fees are excessive. The basic design was

I applied to YC to bring this idea to the US (rejected). Credit cards are our primary form of digital money and their fees are excessive. The basic design was ACH money into the wallet, transfer money between balances for ultra low cost (1%), ACH money out of the wallet. The difficulties are regulation. Doing this would make you a money service business and banks really don't want to touch that. Plus it costs a nice chunk of change to register in every state. If card processing companies are taking around 3% + 30 cents of each transaction, they've effectively devalued our money by that much. I think you could skip all the NFC terminal nonsense and just do QR code based payments with the camera. Make low fee transactions a reality. Then you could pay for individual news articles online, support forums monthly (no way to pay a fraction of a cent for a page view), or tip your favorite streamer. It would be beautiful. It could also set us free from the ad based tracking economy. Maybe one of the big players will implement it (Google, Apple, Walmart), or at least figure out the business model for someone to copy. I think it could really change the US economy.

pishpash 8y ago
The claim is that the fees primarily cover fraud and fund various consumer protections. It would be interesting to know how much of the 3% that actually is.
- TACIXAT 8y ago
  I bet a lot of those go to rewards. Also, cards are pretty insecure. Maybe a phone with a lock on it to prevent physical theft and use, and all the data you would have associated with each transaction would make a great fraud detection system.
  - driverdan 8y ago
    > I bet a lot of those go to rewards. This is the kind of thing you should know off the top of your head if you're interested in competing with them.
    - TACIXAT 8y ago
      Yea, that's one piece of information I haven't found. I'll have to look if it's in SEC filings for credit card companies.
gamblor956 8y ago
ACH transfer between bank accounts is generally free, especially between accounts at the same bank. They're even blackout ready...you can use these things called "checks" (or "cheques") to execute account transfers. Also, most CC companies aren't taking 3%+30c per transaction. Visa, for example, is 1.5% plus 10c per transaction. Amex, on the expensive side, was between 1.85% plus 10c and 3.00% plus 10c depending on the type of merchant. If you don't have a basic factual understanding of how financial transfers actually work, it's not surprising you got rejected from YC.
- TACIXAT 8y ago
  >If you don't have a basic factual understanding of how financial transfers actually work, it's not surprising you got rejected from YC. I'm so over people being dicks online. Sorry I didn't include an appendix with payment fee breakdowns. Online payment processors work at that fee structure because there is an added player (see Stripe and Paypal's fees). For the breakdown between acquiring bank, issuing bank, and processor, the acquirer and processor (Visa, MC) actually only get a small cut of each transaction. The bulk of it goes to the bank that issues the card. Getting rejected from YC doesn't say anything about me or my idea. Plenty of people get rejected. My 4 paragraph comment on this issue doesn't reflect my total knowledge of it. Try to be nicer in the future.
jboles 8y ago
> Credit cards are our primary form of digital money and their fees are excessive. The basic design was ACH money into the wallet, transfer money between balances for ultra low cost (1%), ACH money out of the wallet. 2% (credit card fee) is "excessive", but 1% is "ultra (!) low cost"?
- TACIXAT 8y ago
  The fixed transaction cost is really what eats up low value transactions. 30 cent fee means anything below 30 cents is unusable. A 2 percent fee with no fixed cost would be fine with me. If you know of a processor that does this, let me know.
  - jboles 8y ago
    That’s a fair point, I had not considered the micro transaction aspect.
ac29 8y ago
So its more expensive than debit cards (0.05% + 21c) to the merchants, and has no reward incentive for the consumer (1-1.5% back in cash or points is typical). Who was it supposed to appeal to?

pishpash 8y ago

The claim is that the fees primarily cover fraud and fund various consumer protections. It would be interesting to know how much of the 3% that actually is.

TACIXAT 8y ago
I bet a lot of those go to rewards. Also, cards are pretty insecure. Maybe a phone with a lock on it to prevent physical theft and use, and all the data you would have associated with each transaction would make a great fraud detection system.
- driverdan 8y ago
  > I bet a lot of those go to rewards. This is the kind of thing you should know off the top of your head if you're interested in competing with them.
  - TACIXAT 8y ago
    Yea, that's one piece of information I haven't found. I'll have to look if it's in SEC filings for credit card companies.

gamblor956 8y ago

ACH transfer between bank accounts is generally free, especially between accounts at the same bank. They're even blackout ready...you can use these things called "checks" (or "cheques") to execute account transfers. Also, most CC companies aren't taking 3%+30c per transaction. Visa, for example, is 1.5% plus 10c per transaction. Amex, on the expensive side, was between 1.85% plus 10c and 3.00% plus 10c depending on the type of merchant. If you don't have a basic factual understanding of how financial transfers actually work, it's not surprising you got rejected from YC.

TACIXAT 8y ago
>If you don't have a basic factual understanding of how financial transfers actually work, it's not surprising you got rejected from YC. I'm so over people being dicks online. Sorry I didn't include an appendix with payment fee breakdowns. Online payment processors work at that fee structure because there is an added player (see Stripe and Paypal's fees). For the breakdown between acquiring bank, issuing bank, and processor, the acquirer and processor (Visa, MC) actually only get a small cut of each transaction. The bulk of it goes to the bank that issues the card. Getting rejected from YC doesn't say anything about me or my idea. Plenty of people get rejected. My 4 paragraph comment on this issue doesn't reflect my total knowledge of it. Try to be nicer in the future.

jboles 8y ago

> Credit cards are our primary form of digital money and their fees are excessive. The basic design was ACH money into the wallet, transfer money between balances for ultra low cost (1%), ACH money out of the wallet. 2% (credit card fee) is "excessive", but 1% is "ultra (!) low cost"?

TACIXAT 8y ago
The fixed transaction cost is really what eats up low value transactions. 30 cent fee means anything below 30 cents is unusable. A 2 percent fee with no fixed cost would be fine with me. If you know of a processor that does this, let me know.
- jboles 8y ago
  That’s a fair point, I had not considered the micro transaction aspect.

ac29 8y ago

So its more expensive than debit cards (0.05% + 21c) to the merchants, and has no reward incentive for the consumer (1-1.5% back in cash or points is typical). Who was it supposed to appeal to?