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What's the barrier to using Stripe to top-up credit (say USD 20 buys 1 million virtual credits) then spending those on the web buying tiny things for tiny amoun

What's the barrier to using Stripe to top-up credit (say USD 20 buys 1 million virtual credits) then spending those on the web buying tiny things for tiny amounts? In a sense, WeChat Pay etc in China have already "overcome barriers" to micropayments, even tho the amounts do not need to be micro.

jiofih 7y ago
That means the company holding that credit becomes subject to financial regulation, which is complex and expensive. Plus merchants now have to integrate with yet another middleman. The simpler solution is: no fees for small debit transactions, once the baking system is modernized the cost of a transaction is in fact close to zero. This is already the case in Western Europe.
- buboard 7y ago
  No fees doesn’t solve the onerous accounting issues. This needs some kind of mechanism and legislation that allows accounting of a small amount of money without disclosing the transacted parties
- slowenough 7y ago
  Interesting. I didn't know the blocker was financial regulation. Thanks for letting me know!
TACIXAT 7y ago
The term to look up is money service business. It wouldn't be so bad except there are federal regulations as well as state regulations. For an internet enabled system, that means registering in 50 states. An estimate I saw put getting licenses for all states in the 200k range. This difficulty compounds because banks went through a big derisking and are more or less allergic to MSBs. It seems a little anti competitive to have the banks deny you access to payment processing. The alternative is they will charge very high account maintenance fees (10k per month has been quoted to me). I really want to build something like this but it will be a legal nightmare. No wonder people are looking to cryptocurrencies to solve these issues. I'm actually a little excited about libra since they will have the resources to overcome these hurdles.
jdurden 7y ago
They're out there. I just saw a company on product hunt doing this: https://www.intertimes.org https://www.intertimes.org

jiofih 7y ago

That means the company holding that credit becomes subject to financial regulation, which is complex and expensive. Plus merchants now have to integrate with yet another middleman. The simpler solution is: no fees for small debit transactions, once the baking system is modernized the cost of a transaction is in fact close to zero. This is already the case in Western Europe.

buboard 7y ago
No fees doesn’t solve the onerous accounting issues. This needs some kind of mechanism and legislation that allows accounting of a small amount of money without disclosing the transacted parties
slowenough 7y ago
Interesting. I didn't know the blocker was financial regulation. Thanks for letting me know!

TACIXAT 7y ago

The term to look up is money service business. It wouldn't be so bad except there are federal regulations as well as state regulations. For an internet enabled system, that means registering in 50 states. An estimate I saw put getting licenses for all states in the 200k range. This difficulty compounds because banks went through a big derisking and are more or less allergic to MSBs. It seems a little anti competitive to have the banks deny you access to payment processing. The alternative is they will charge very high account maintenance fees (10k per month has been quoted to me). I really want to build something like this but it will be a legal nightmare. No wonder people are looking to cryptocurrencies to solve these issues. I'm actually a little excited about libra since they will have the resources to overcome these hurdles.

jdurden 7y ago

They're out there. I just saw a company on product hunt doing this: https://www.intertimes.org https://www.intertimes.org