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Something really needs to be done about these "money transmitter" services. They essentially get all the power of a bank and none of the oversight, and de-fact
by paulmd 5y ago
Something really needs to be done about these "money transmitter" services. They essentially get all the power of a bank and none of the oversight, and de-facto there is very little way to avoid them when transacting on the internet.
The EU can do giro transfers but in the US, if you want to send money and you don't want to do a check (which have a lot of gotchas, like availability-vs-clearance of funds) then you pretty much have to use a money transmitter service. And these stories have been happening for 15 years at this point, it feels like a matter of "when" they screw you more than "if" at this point.
Pretty unlikely that constructive legislation gets passed in the US ever again though. We have passed the point-of-no-return where even the most obvious stuff can't get passed let alone if Paypal or whoever writes a big check to a congressperson to avoid regulation.
- leetcrew 5y ago> Something really needs to be done about these "money transmitter" services. They essentially get all the power of a bank and none of the oversight, and de-facto there is very little way to avoid them when transacting on the internet. I guess it depends what kinds of transactions you are making on the internet... I have never used paypal or anything similar to send money to a stranger. I occasionally use venmo to send small sums to friends, but never an amount I would be sad to lose. if you want all the guarantees that come from dealing with a regulated financial institution, you should... go to your bank? they should be happy to set up an ach/wire transfer for you.
- colpabar 5y agoYour argument is kind of similar to saying "we don't need to force cars to have seatbelts and airbags because I only ride a horse."
- crmd 5y agoNo, they are saying don't use the wrong tool for the job. We need low-friction services for splitting a dinner check and we also need highly regulated services for paying a freelancer or buying a car.
- colpabar 5y agoSure, but lots of those services already exist, and we continually read stories about people getting screwed by them. GP's point seemed to be "just use a bank", but the entire reason these other services exist is because banks can be hard to work with. Responding to a comment of "we should try and prevent people from getting screwed" with "people should just be smart like me" doesn't seem very helpful.
- mvc 5y ago> I guess it depends what kinds of transactions you are making on the internet We're long past the time when that kind of excuse can be used by internet companies. They have taken enough market share now from "traditional" companies to be held to the similar standards. We see the billions they make in profits. Let's now see them use some of those profits to provide the service they boast of in their marketing.
- irrational 5y agoFYI, do not do a wire transfer from a bank. They charge exorbitant fees. Places like your local grocery store will do it for you for less than $1. My local store does it for 25 cents.
- gok 5y agoMoney transmitter services, including PayPal, are highly regulated in the US. https://en.wikipedia.org/wiki/Money_transmitter https://en.wikipedia.org/wiki/Money_transmitter (Note that eBay no longer owns PayPal, nor was it even used in this case)
- gnopgnip 5y agoMoney transmitters are still subject to Reg E and oversight. The truth is these same things happen with regular bank accounts. If you bounce some checks, or you have a "risky" business even without any chargebacks, the bank will ask for more info and then close your account and keep the money until you prove that you aren't someone else that previously defrauded them, a nearly impossible task. The recourse is mostly the same.
- paulmd 5y agoSo, what do you think the guy did in this case? There's lots of people who don't do anything wrong and then they just get flagged for whatever reason, and their assets are frozen with no recourse other than "go to arbitration [paid for by the company] and hope they give your money back".
- sizzle 5y agoMake a service that usurps eBay with crypto payments and an escrow service that signs the transaction after proof of KYc for scam sellers and a reserve fund to reimburse buyers for fraud, etc. I can think of so many better ways than the PayPal/eBay fund freezing Mafia