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Fintech has been in America for a long time. Anywhere from Paypal (with all its faults) to Simple (acquired by BBVA Compass) to Stripe to Square and it has been

Fintech has been in America for a long time. Anywhere from Paypal (with all its faults) to Simple (acquired by BBVA Compass) to Stripe to Square and it has been around for a while. What is missing is the standalone challenger banks and that is because of the onerous banking regulations, and the litany of KYC and AML regulations that box out poor people (they are unprofitable due to the heavy regulations) from the financial ecosystem. If we lowered or removed the regulatory burdens (especially at the federal level) then innovation would blossom and VCs would fund every challenger to the incumbents.

skeletal88 6y ago
So you are saying that in Europe the fintech firms are successful because we somehow have less regulations? Here we don't need anything like CashApp or Venmo or Paypal, because our bank transfers are already fast enough and cheap for everyone. One final thing that would be nice, if we somehow could get rid of the requirement for credit cards when online shopping. Here in Estonia we have our own bank link, where the shop sends the shopper with an encrypted link to his bank, where he can approve the transfer with prefilled fields. I know the Netherlands have their iDEAL that works in a similar way and other countries have their own systems, but there is nothing that is globally accepted. Using some data printed on a card is some stone age technology when compared to the other systems we are using to do online banking.
- bluecalm 6y ago
  We have Blik in Poland which is becoming more and more popular. Most of my local online purchases are by Blik already. All major banks have it integrated and it's just very convenient and fast to use.
  - danaris 6y ago
    Completely off-topic, but that's an amusingly unfortunate name to English-speakers—"bilk" means "to cheat someone".
  - humanlion87 6y ago
    That's interesting. So does it mean you can cut out the card payment networks like Visa and MasterCard?
    - bluecalm 6y ago
      Yes, Blik doesn't use those networks. It's better, cheaper, safer and more convenient. It could easily eat Visa's and MasterCard's lunch in EU if there was more interest in pushing it to other EU countries.
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NamTaf 6y ago
This is an exceptionally wild take considering you're trying to compare the US's regulatory landscape to Europe's or Australia's. Both of their banking sectors are much more regulated. I don't agree with your conclusion at all.
pxlpshr 6y ago
In my experience working in finance and healthcare as a founder, education and cash flow needs box out poor people from conventional banking; they live check to check, public schools in poor areas are below average, et al. Poverty feeds on itself, unfortunately. KYC/AML ensure our online applicants are who they say they are. It's a very straight forward regulatory requirement to safe guard the movement of money by US citizens and not foreign entities. This is one of many anti-fraud measures we take because fraud is a massive issue and capital loss is exceptionally hard to recover -- especially for internet banks where attacks come from all over. Fraud networks are extremely sophisticated and based on your remark about KYC/AML, I don't get the impression you appreciate the depth of it. It has nothing to do with low-income citizens except to the degree to which social determinants (lack of transportation) may prevent someone from getting their identification renewed, but this is a much bigger issue for that individual than just opening a bank account. Online banking is more accessible for low-income for this reason vs. brick and mortar who avoid branches in those areas. For a startup or even a crusty old bank looking to improve margin and slim down their back office, services like Alloy make KYC/AML a very simple request/response component within our application. There's really nothing complex about it. I'll take KYC over HIPAA any day of the week.
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skeletal88 6y ago

So you are saying that in Europe the fintech firms are successful because we somehow have less regulations? Here we don't need anything like CashApp or Venmo or Paypal, because our bank transfers are already fast enough and cheap for everyone. One final thing that would be nice, if we somehow could get rid of the requirement for credit cards when online shopping. Here in Estonia we have our own bank link, where the shop sends the shopper with an encrypted link to his bank, where he can approve the transfer with prefilled fields. I know the Netherlands have their iDEAL that works in a similar way and other countries have their own systems, but there is nothing that is globally accepted. Using some data printed on a card is some stone age technology when compared to the other systems we are using to do online banking.

bluecalm 6y ago
We have Blik in Poland which is becoming more and more popular. Most of my local online purchases are by Blik already. All major banks have it integrated and it's just very convenient and fast to use.
- danaris 6y ago
  Completely off-topic, but that's an amusingly unfortunate name to English-speakers—"bilk" means "to cheat someone".
- humanlion87 6y ago
  That's interesting. So does it mean you can cut out the card payment networks like Visa and MasterCard?
  - bluecalm 6y ago
    Yes, Blik doesn't use those networks. It's better, cheaper, safer and more convenient. It could easily eat Visa's and MasterCard's lunch in EU if there was more interest in pushing it to other EU countries.

deleted 6y ago

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NamTaf 6y ago

This is an exceptionally wild take considering you're trying to compare the US's regulatory landscape to Europe's or Australia's. Both of their banking sectors are much more regulated. I don't agree with your conclusion at all.

pxlpshr 6y ago

In my experience working in finance and healthcare as a founder, education and cash flow needs box out poor people from conventional banking; they live check to check, public schools in poor areas are below average, et al. Poverty feeds on itself, unfortunately. KYC/AML ensure our online applicants are who they say they are. It's a very straight forward regulatory requirement to safe guard the movement of money by US citizens and not foreign entities. This is one of many anti-fraud measures we take because fraud is a massive issue and capital loss is exceptionally hard to recover -- especially for internet banks where attacks come from all over. Fraud networks are extremely sophisticated and based on your remark about KYC/AML, I don't get the impression you appreciate the depth of it. It has nothing to do with low-income citizens except to the degree to which social determinants (lack of transportation) may prevent someone from getting their identification renewed, but this is a much bigger issue for that individual than just opening a bank account. Online banking is more accessible for low-income for this reason vs. brick and mortar who avoid branches in those areas. For a startup or even a crusty old bank looking to improve margin and slim down their back office, services like Alloy make KYC/AML a very simple request/response component within our application. There's really nothing complex about it. I'll take KYC over HIPAA any day of the week.

deleted 6y ago

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