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Yeah its fascinating that quick payments probably is more of a problem than a benefit.

by rr808 4y ago

tialaramex 4y ago
Do you think? What I see is that it's a useful way to move money and, as expected, crooks wanted to use it to steal money. It's more remarkable when we invent things that move money and don't get used for crime. For example the UK's Direct Debit turns out to be almost useless for crime, because it can be unwound, so, if you use it to steal money you run into two closely related problems: 1. When the victim realises they just undo the transaction, and get their money back 2. Because the bank doesn't want to be on the hook for that, their capital requirements to allow Direct Debit are eye watering. Out of reach of ordinary crooks.
- bombcar 4y ago
  What's the defense against abuse of #1 - that's the usual problem we see with perfectly reversible transactions.
  - tialaramex 4y ago
    Because it's intended only to pay large outfits who are owed money, this just isn't a problem. It's as though you woke up one day and discovered the customer didn't pay last month's bill - even though in reality they did pay but then unwound it. The vast majority of your customers are legitimate, so there's usually going to be a reason why they unwound the payment. You can of course pursue them for payment as you would have if they were overdue on 30-day terms or whatever, but you definitely want to try to figure out why the unwind happened before you kick that off or you may waste a lot of money on a fruitless process. Lets take a real example where I had my bank unwind bill payments. Water utility keeps billing me for more water than I'm using. I read my meter, I see I used 2.5 cubic metres of water, they bill me for 8 cubic meters, and the meter number they've listed is wrong. So I call, they send an engineer, the engineer looks at the meters, tries some things, declares that yeah, whoever installed these meters fucked up. No worries, we'll fix it, your next bill will be correct. But the next bill is wrong too. Call utility, engineer comes out, same diagnosis, same lack of consequences. Rinse, repeat. OK, I see the pattern, unwind payments. Now obviously the water utility's lawyers threatened to take me to court for non-payment - I didn't pay them any money for the water they've incorrectly billed me for. But they won't actually go to court because lawyers don't want to get disciplinary hearings for their employer's incompetence. They still have personal responsibility (the employer can pay for their liability insurance but it is personal liability, "But my company ..." doesn't work on judges) for these proceedings. So a human lawyer will take five minutes to look at the paperwork, see the company fucked up and not file. But you can't just have customers who don't pay you indefinitely, these are for-profit companies, so a few months later I get a phone call. They can't fix their records apparently, it's just such a tangled mess, so, new plan, delete my customer account, make a new customer account with a zero balance, attach the correct meter to the account, get a fresh reading and start from there. Is that OK by me? Yes it is. I think in the end this meant instead of paying for water I didn't use, I saved about six months on water I did use, which seems fair.

Yeah its fascinating that quick payments probably is more of a problem than a benefit.

by rr808 4y ago

Yeah its fascinating that quick payments probably is more of a problem than a benefit.

Do you think? What I see is that it's a useful way to move money and, as expected, crooks wanted to use it to steal money. It's more remarkable when we invent things that move money and don't get used for crime. For example the UK's Direct Debit turns out to be almost useless for crime, because it can be unwound, so, if you use it to steal money you run into two closely related problems: 1. When the victim realises they just undo the transaction, and get their money back 2. Because the bank doesn't want to be on the hook for that, their capital requirements to allow Direct Debit are eye watering. Out of reach of ordinary crooks.

bombcar 4y ago
What's the defense against abuse of #1 - that's the usual problem we see with perfectly reversible transactions.
- tialaramex 4y ago
  Because it's intended only to pay large outfits who are owed money, this just isn't a problem. It's as though you woke up one day and discovered the customer didn't pay last month's bill - even though in reality they did pay but then unwound it. The vast majority of your customers are legitimate, so there's usually going to be a reason why they unwound the payment. You can of course pursue them for payment as you would have if they were overdue on 30-day terms or whatever, but you definitely want to try to figure out why the unwind happened before you kick that off or you may waste a lot of money on a fruitless process. Lets take a real example where I had my bank unwind bill payments. Water utility keeps billing me for more water than I'm using. I read my meter, I see I used 2.5 cubic metres of water, they bill me for 8 cubic meters, and the meter number they've listed is wrong. So I call, they send an engineer, the engineer looks at the meters, tries some things, declares that yeah, whoever installed these meters fucked up. No worries, we'll fix it, your next bill will be correct. But the next bill is wrong too. Call utility, engineer comes out, same diagnosis, same lack of consequences. Rinse, repeat. OK, I see the pattern, unwind payments. Now obviously the water utility's lawyers threatened to take me to court for non-payment - I didn't pay them any money for the water they've incorrectly billed me for. But they won't actually go to court because lawyers don't want to get disciplinary hearings for their employer's incompetence. They still have personal responsibility (the employer can pay for their liability insurance but it is personal liability, "But my company ..." doesn't work on judges) for these proceedings. So a human lawyer will take five minutes to look at the paperwork, see the company fucked up and not file. But you can't just have customers who don't pay you indefinitely, these are for-profit companies, so a few months later I get a phone call. They can't fix their records apparently, it's just such a tangled mess, so, new plan, delete my customer account, make a new customer account with a zero balance, attach the correct meter to the account, get a fresh reading and start from there. Is that OK by me? Yes it is. I think in the end this meant instead of paying for water I didn't use, I saved about six months on water I did use, which seems fair.