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Banks are not really necessary. Even by basic game theory, scamming your customers has long term negative value. Reputation is worth much more than money. We j
by ss248 8y ago
Banks are not really necessary.
Even by basic game theory, scamming your customers has long term negative value.
Reputation is worth much more than money.
We just have to design systems around it.
- mantas 8y agoBut someone has to take the gamble. Or everybody uses only established reputable sellers. And newcomers can't break into the market. Customer protection is great to give small businesses a chance.
- ss248 8y agoBasic solution would be for seller with low reputation to lower the price. Even if not a lot of buyers take the risk, lower price should eventually attract enough people to allow a legitimate seller to build the reputation.
- mantas 8y agoPeople already don't trust too low prices, because that's a sign of a scammer. And margins are already rather low. Would you take a gamble save €10 or loose €1000? Even with all the customers' protection in place, I already rather pay 1-2% more if that means buying for a more reputable seller. Without the protection, they'd have to be in scammers' price range to be considered... In many cases the entrenched players in the market already have good prices. Upstarts who can't use economy-of-scale try to make their way by providing superb customer service or providing a better service in another way. But it's hard to give it a try when you don't have the protection of chargeback.
- ss248 8y agoWell, it's hard to compete in the already established markets. But you have to, one way or another, usually by providing better value. Be it lower price, faster delivery or higher quality products. Otherwise, if there is no initiative for people to use your services, are you really necessary?
- mantas 8y agoI'd argue that competition is mandatory in market economy. Having an easy way to get a basic level of customer trust lowers the entry barrier. Which is good to prevent monopolies and ensure market is functioning properly. One of the most important values one can provide is trust. A known bad option is many times better than the unknown nothing. An upstart would have to provide much much more value to make up for that.
- supermatt 8y agoPretty sure the near-zero cost of creating a new "identity" to a scammer means they can remain competitive at any price...
- C1sc0cat 8y agoNo you just change your name and try again. And do you want to tell some one who has lost 100k+ to bank fraud when buying a house - a common and increasing type of fraud in the UK
- hesk 8y agoIt's not your name that takes the reputation hit because you use a stolen identity.
- mikeash 8y agoUnfortunately, a lot of people are too short-sighted to avoid acts that are only negative in the long term.
- Frondo 8y agoIf reputation were worth more than money, why is fraud still so prevalent after millennia of money-based transactions?