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The fraud is only a problem because of an ancient model where snooping on a bunch of numbers printed on a card can be used to verify any random transaction. Ca

The fraud is only a problem because of an ancient model where snooping on a bunch of numbers printed on a card can be used to verify any random transaction. Cashback is only a thing because those payment providers are taxing all transactions in the US to an unreasonable level, which just raises overall prices. Great business model though, take 5% to give back 3% and the customer is happy about that.

lmm 5y ago
> The fraud is only a problem because of an ancient model where snooping on a bunch of numbers printed on a card can be used to verify any random transaction. No, there are plenty of fraud models that affect all payment methods, such as "hand over a box that's full of bricks instead of the product". Settling the payment exactly when the goods are delivered is often not practical.
- KptMarchewa 5y ago
  >Settling the payment exactly when the goods are delivered is often not practical. That's what OLX, most popular "person-to-person marketplace" in Poland does (is there a word for it?) If you use delivery, the funds are kept in escrow by OLX until you confirm or dispute.
  - lmm 5y ago
    As a consumer, that sounds less good than what a credit card provides: I can't chargeback if a fault develops after I've already received the goods. I have to figure out whether to trust this OLX, which is better than having to figure out whether to trust the individual seller, but less good than only having to trust my card provider - particularly when it presumably involves learning their dispute-resolution processes, which are going to be different from everyone else's. For a seller it sounds more cumbersome too. Having to lock up all the payments you receive is significantly worse than receiving it upfront and paying back in the case of a dispute, and makes some kinds of business completely impossible (think travel agents). It's hard to do usage-based billing - you'd have to figure out how much to ask for as a deposit up-front instead, which is awkward if usage levels differ by orders of magnitude (think cloud providers). And fundamentally this OLX is taking a very similar role to a credit card network and most of the downsides of them still apply. They're presumably taking a cut of most transactions that they do this for (either directly or through other fees). They presumably make judgements about what you are and aren't allowed to sell on their platform, and at the point where they're big enough to be useful to the consumer they're also big enough to be subject to political pressure about those judgements.

lmm 5y ago

> The fraud is only a problem because of an ancient model where snooping on a bunch of numbers printed on a card can be used to verify any random transaction. No, there are plenty of fraud models that affect all payment methods, such as "hand over a box that's full of bricks instead of the product". Settling the payment exactly when the goods are delivered is often not practical.

KptMarchewa 5y ago
>Settling the payment exactly when the goods are delivered is often not practical. That's what OLX, most popular "person-to-person marketplace" in Poland does (is there a word for it?) If you use delivery, the funds are kept in escrow by OLX until you confirm or dispute.
- lmm 5y ago
  As a consumer, that sounds less good than what a credit card provides: I can't chargeback if a fault develops after I've already received the goods. I have to figure out whether to trust this OLX, which is better than having to figure out whether to trust the individual seller, but less good than only having to trust my card provider - particularly when it presumably involves learning their dispute-resolution processes, which are going to be different from everyone else's. For a seller it sounds more cumbersome too. Having to lock up all the payments you receive is significantly worse than receiving it upfront and paying back in the case of a dispute, and makes some kinds of business completely impossible (think travel agents). It's hard to do usage-based billing - you'd have to figure out how much to ask for as a deposit up-front instead, which is awkward if usage levels differ by orders of magnitude (think cloud providers). And fundamentally this OLX is taking a very similar role to a credit card network and most of the downsides of them still apply. They're presumably taking a cut of most transactions that they do this for (either directly or through other fees). They presumably make judgements about what you are and aren't allowed to sell on their platform, and at the point where they're big enough to be useful to the consumer they're also big enough to be subject to political pressure about those judgements.