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There's a whole infrastructure of liability for payer and merchant that exists below the surface of every transaction. This is why, unfortunately, credit card
by docker_up 8y ago
There's a whole infrastructure of liability for payer and merchant that exists below the surface of every transaction.
This is why, unfortunately, credit card companies can charge the fees that they do. For example, the issuing banks take on liability if payers don't pay, for example. I don't think Stripe is willing to get in the business of this unless they want to turn into a bank.
- wbronitsky 8y agoI think you might be surprised how much risk Stripe is willing to take on when they can gain hundreds of basis points on cutting out the networks. Only time will tell though :)
- docker_up 8y agoNot if it means having to turn into a bank. The repercussions on their business will be draconian. Although I would be surprised if they haven't already explored or fully gone through a money transmitter license for a subsidiary.
- deleted 8y ago[deleted]
- qaq 8y agoCan't they just buy a Bank?
- rossdavidh 8y agoAlmost certainly they would, and there might be some small banks out there they could buy or merge with. That would get them out of a lot of legal issues, and also buy them some relevant legal expertise. However, I seem to recall WalMart investigating this option a while back, and it never happened. It may be that the more you look at the option of becoming a bank, the more it looks like it would take over your life/business. Also, there are doubtless many lobbyists who the existing banks employ who would try to stop it.
- qaq 8y agoI think the issue is being a bank vs owning a bank.
- i2shar 8y agoWhat's the risk if payments were to be debited from the customer's bank directly? Related side note: I've always wondered, if people don't ever need the "credit" in the credit card transaction, could they get a discount of 2 odd % on each transaction that the CC companies charge, say if they connect their bank accounts directly to they payment methods? This would effectively a debit card but not using the VISA/MC networks. What's stopping Apple/Google pay from processing payments directly from my bank?
- docker_up 8y agoAlmost none. PIN/passwords render fraud to negligible amounts. That's why debit card transaction have fees for ~$0.10 under Durbin. Companies like Stripe make a killing whenever their customers use debit cards instead of credit cards because they're charging 2.9 +0.30 with a cost of 0.10. But if you had to rely on debit cards only, then commerce at least in the US would grind to a halt. I believe the average American CC debt is ~$8000.