6 ms·

It's interesting that there is so much technology and third party business involved in the process of moving value. - Visa has a market cap of $463B - Masterc

by TekMol 4y ago

It's interesting that there is so much technology and third party business involved in the process of moving value. - Visa has a market cap of $463B - Mastercard $362B - PayPal $90B - Block $48B Could it theoretically all be automated?

nonethewiser 4y ago
Arent those the companies automating it?
timerol 4y ago
No. (Channels patio11) As a society we have decided to delegate a bunch of responsibilities to the companies that move money. The most notable one is fraud protection. The companies that make this much money do so by pretending that a transfer of money is a clean, simple, and absolute thing. In reality it is messy, reversible, and fraud-prone. Being able to transfer $1B dollars as easily as you are able to transfer $1 would be a failure of the system, not a feature.
- rbliss 4y ago
  That was a pretty good patio11!
- TekMol 4y ago
  I have been paying and being paid for decades now, and I have never involved a payment processor in a dispute I had with the other side. If arbitration is the reason these companies exists, it seems like bad deal. Maybe they sell an illusion?
  - ericd 4y ago
    You might be surprised how often those disputes are used (and abused), then.
  - pchristensen 4y ago
    "I have never been owned by another person, so there is no need for a law against slavery." The world is full of services, valuable, difficult to provide services, that a given person will never consume. Doesn't mean no one else does.
  - lxgr 4y ago
    > I have been paying and being paid for decades now, and I have never involved a payment processor in a dispute I had with the other side. Have you considered that the possibility of disputes and the existence of a framework for resolving them is part of the reason for that?
    - xur17 4y ago
      But is paying 2-3% on each transaction worth it for that?
      - lxgr 4y ago
        Dispute resolution is not where the 2-3% go (as evidenced by disputes also existing on US debit cards, where it's 0.05%, and EU credit and debit cards, where it's 0.3% and 0.2% respectively). Some of it is spent by the issuer on fraud expenses that they are assigned liability for, but given the same reasoning as above, if that was more than 0.05%, there wouldn't be any profitable debit issuers left in the US (and similarly for the EU, although the regulator is changing the fraud calculus there significantly by enforcing strong cardholder authentication, so it's not an apples to apples comparison). In other words, if there was political will to get rid of credit card points in the US, we could have all of this for much cheaper. (We might need to look into scheme fees too while we're at it, e.g. by finding a market solution that creates actual competition there.)
  - changoplatanero 4y ago
    Maybe your credit card number was stolen without your knowledge and they took care of it for you without you even being aware
    - abigail95 4y ago
      That would be whoever made the cards fault. We don't give credit for cleaning up your own mess, that's the minimum standard for engaging in a beneficial relationship. It's not a value proposition from gmail that you can't access my inbox just from knowing my address. I can't believe you can be a $400B company and the value comes from stopping fraud that you enabled by your own product design.
      - TylerE 4y ago
        Much of the fraud is merchants defrauding their customers.
    - ddorian43 4y ago
      Nah.
    - willcipriano 4y ago
      They took care of it for themselves, when someone commits fraud it isn't your problem because they used your name to do it. Imagine if you were defrauded for a few hundred bucks by someone claiming to be a big celebrity. You probably wouldn't even be able to get into contact with the actual person, let alone have them jump through a bunch of hoops, spend time on hold with your staff or go to the post office to send you copies of documents. They wouldn't bother to respond to you, they have no obligation to, whatever happened had nothing to do with them.
  - darkerside 4y ago
    Countering your own anecdata with my own, I have. To the tune of $5,000+.
  - djbusby 4y ago
    I've used banks and cards to help resolve fraud. Rarely, but I love it. And now the bank pushed me to use Zelle - which has zero protection.
    - lxgr 4y ago
      > [...] bank pushed me to use Zelle - which has zero protection. Also channeling patio11 [1]: This is actually a pretty interesting ongoing experiment as to whether banks can opt out of Regulation E. [1] https://twitter.com/patio11/status/1500993875627761666 https://twitter.com/patio11/status/1500993875627761666
      - throwaway2037 4y ago
        No kidding. Zelle looks so dangerous from consumer point of view. It is so easy to get scammed and almost impossible to be made whole. I am fine with Zelle if banking regulators require Reg E. The best part of Reg E: Since banks are almost completely responsible for fraud in their customers named, they take it very seriously!
    - jchw 4y ago
      To be fair, the trade-off is that there aren't any fees and it's nearly instantaneous. For the type of transaction similar to handing someone you know a wad of cash, it seems pretty good.
fragmede 4y ago
I don't think visa is doing it by hand and pencil and paper though, and the value in those companies is that they're taking bioff the top of every transaction that runs on their rails. so it's already automated too a huge degree, it's just that automation is what gives those companies that market cap
- TekMol 4y ago
  But what is the value they provide, which justifies their earnings and therefore market cap?
  - fragmede 4y ago
    by being the digital rails. without visa/mc, all you have in your wallet is a piece of useless plastic. there's huge value in the convenience of not having to use cash, and then the rewards programs on top of that.
    - treis 4y ago
      Sure but that's not why Visa/MC are worth that much. They're worth that much because they're a duopoly that can dictate prices.
      - mbesto 4y ago
        > that can dictate prices Prices that are capped by the government: The Fed’s 2011 rules capped fees at 21 cents plus five basis points of each transaction, and also allowed an additional one cent fee per transaction for fraud prevention, where applicable.[0] [0] - https://news.bloomberglaw.com/antitrust/biden-takes-on-visa-mastercard-over-debit-card-fees-explained https://news.bloomberglaw.com/antitrust/biden-takes-on-visa-...
        treis 4y ago
        That's for debit cards only. Which Visa/MC have knee capped with their monopoly power so it doesn't really matter. Actually helps as a distraction
rglover 4y ago
Yes, with Bitcoin.
- methodical 4y ago
  And by using Bitcoin to automate all these transactions you get a bunch of very cool features such as constantly being at risk of losing your life savings due to phishing, scamming, hacking, etc., etc., etc. unless you store a hard wallet in your intestines and memorize the recovery words (better hope you don't forget any or your life savings is gone!). The cool thing about all of this is that it's a feature of Bitcoin to be able to irreversibly lose your life savings, without any ability to recoup your losses. All of this to say that Bitcoin is obviously the way forward for global transactions, despite the fact it processes transactions as slow as molasses and the only way to make it faster (Lightning Network) is to sacrifice the checks and balances that maxis praise as the hallmark of Bitcoin lol
  - throwaway2037 4y ago
    This reply was excellent. This part really made me laugh: unless you store a hard wallet in your intestines and memorize the recovery words (better hope you don't forget any or your life savings is gone!) To continue the "lulz", South American drug traffickers will soon be cutting those people open to extract their hard wallet! Enough with the jokes! Real question: Sometimes you read about FBI chasing down ransomware groups and recovering Bitcoins. How do they do it? If they can identify the wallet, how do they lay claim? Do they find where the wallet is hosted and force exchange to transfer wallet to FBI? Please don't read this post as an attempt to defend Bitcoin, nor say that FBI is a good way for me to reverse a fraudulent Bitcoin transaction!
  - rglover 4y ago
    > And by using Bitcoin to automate all these transactions you get a bunch of very cool features such as constantly being at risk of losing your life savings due to phishing, scamming, hacking, etc., etc. All lies. > unless you store a hard wallet in your intestines and memorize the recovery words (better hope you don't forget any or your life savings is gone!) Lies. Just write them down and store them securely. You can memorize them if you like. It's also wise to store multiple physical copies in various locations to avoid this exact scenario. > The cool thing about all of this is that it's a feature of Bitcoin to be able to irreversibly lose your life savings, without any ability to recoup your losses. Yes, you can't be utterly careless (and I'm not sure what the argument is for wanting to be). > the only way to make it faster (Lightning Network) is to sacrifice the checks and balances that maxis praise as the hallmark of Bitcoin Yes, which makes sense for small transactions between trusted parties. Large transactions can and should be done on-chain (also with trusted parties). -- I'll continue to listen to the signal [1], not the noise. What makes me happiest is that the people who deserve to win the most will win over the people who deserve it the least. It will be the greatest wealth transfer humanity has ever seen and it won't require any violence or coercion. [1] https://twitter.com/LightningTipB0t/status/1615014798797991938 https://twitter.com/LightningTipB0t/status/16150147987979919...

by TekMol 4y ago

nonethewiser 4y ago

Arent those the companies automating it?

timerol 4y ago

No. (Channels patio11) As a society we have decided to delegate a bunch of responsibilities to the companies that move money. The most notable one is fraud protection. The companies that make this much money do so by pretending that a transfer of money is a clean, simple, and absolute thing. In reality it is messy, reversible, and fraud-prone. Being able to transfer $1B dollars as easily as you are able to transfer $1 would be a failure of the system, not a feature.

rbliss 4y ago
That was a pretty good patio11!
TekMol 4y ago
I have been paying and being paid for decades now, and I have never involved a payment processor in a dispute I had with the other side. If arbitration is the reason these companies exists, it seems like bad deal. Maybe they sell an illusion?
- ericd 4y ago
  You might be surprised how often those disputes are used (and abused), then.
- pchristensen 4y ago
  "I have never been owned by another person, so there is no need for a law against slavery." The world is full of services, valuable, difficult to provide services, that a given person will never consume. Doesn't mean no one else does.
- lxgr 4y ago
  > I have been paying and being paid for decades now, and I have never involved a payment processor in a dispute I had with the other side. Have you considered that the possibility of disputes and the existence of a framework for resolving them is part of the reason for that?
  - xur17 4y ago
    But is paying 2-3% on each transaction worth it for that?
    - lxgr 4y ago
      Dispute resolution is not where the 2-3% go (as evidenced by disputes also existing on US debit cards, where it's 0.05%, and EU credit and debit cards, where it's 0.3% and 0.2% respectively). Some of it is spent by the issuer on fraud expenses that they are assigned liability for, but given the same reasoning as above, if that was more than 0.05%, there wouldn't be any profitable debit issuers left in the US (and similarly for the EU, although the regulator is changing the fraud calculus there significantly by enforcing strong cardholder authentication, so it's not an apples to apples comparison). In other words, if there was political will to get rid of credit card points in the US, we could have all of this for much cheaper. (We might need to look into scheme fees too while we're at it, e.g. by finding a market solution that creates actual competition there.)
- changoplatanero 4y ago
  Maybe your credit card number was stolen without your knowledge and they took care of it for you without you even being aware
  - abigail95 4y ago
    That would be whoever made the cards fault. We don't give credit for cleaning up your own mess, that's the minimum standard for engaging in a beneficial relationship. It's not a value proposition from gmail that you can't access my inbox just from knowing my address. I can't believe you can be a $400B company and the value comes from stopping fraud that you enabled by your own product design.
    - TylerE 4y ago
      Much of the fraud is merchants defrauding their customers.
  - ddorian43 4y ago
    Nah.
  - willcipriano 4y ago
    They took care of it for themselves, when someone commits fraud it isn't your problem because they used your name to do it. Imagine if you were defrauded for a few hundred bucks by someone claiming to be a big celebrity. You probably wouldn't even be able to get into contact with the actual person, let alone have them jump through a bunch of hoops, spend time on hold with your staff or go to the post office to send you copies of documents. They wouldn't bother to respond to you, they have no obligation to, whatever happened had nothing to do with them.
- darkerside 4y ago
  Countering your own anecdata with my own, I have. To the tune of $5,000+.
- djbusby 4y ago
  I've used banks and cards to help resolve fraud. Rarely, but I love it. And now the bank pushed me to use Zelle - which has zero protection.
  - lxgr 4y ago
    > [...] bank pushed me to use Zelle - which has zero protection. Also channeling patio11 [1]: This is actually a pretty interesting ongoing experiment as to whether banks can opt out of Regulation E. [1] https://twitter.com/patio11/status/1500993875627761666 https://twitter.com/patio11/status/1500993875627761666
    - throwaway2037 4y ago
      No kidding. Zelle looks so dangerous from consumer point of view. It is so easy to get scammed and almost impossible to be made whole. I am fine with Zelle if banking regulators require Reg E. The best part of Reg E: Since banks are almost completely responsible for fraud in their customers named, they take it very seriously!
  - jchw 4y ago
    To be fair, the trade-off is that there aren't any fees and it's nearly instantaneous. For the type of transaction similar to handing someone you know a wad of cash, it seems pretty good.

fragmede 4y ago

I don't think visa is doing it by hand and pencil and paper though, and the value in those companies is that they're taking bioff the top of every transaction that runs on their rails. so it's already automated too a huge degree, it's just that automation is what gives those companies that market cap

TekMol 4y ago
But what is the value they provide, which justifies their earnings and therefore market cap?
- fragmede 4y ago
  by being the digital rails. without visa/mc, all you have in your wallet is a piece of useless plastic. there's huge value in the convenience of not having to use cash, and then the rewards programs on top of that.
  - treis 4y ago
    Sure but that's not why Visa/MC are worth that much. They're worth that much because they're a duopoly that can dictate prices.
    - mbesto 4y ago
      > that can dictate prices Prices that are capped by the government: The Fed’s 2011 rules capped fees at 21 cents plus five basis points of each transaction, and also allowed an additional one cent fee per transaction for fraud prevention, where applicable.[0] [0] - https://news.bloomberglaw.com/antitrust/biden-takes-on-visa-mastercard-over-debit-card-fees-explained https://news.bloomberglaw.com/antitrust/biden-takes-on-visa-...
      - treis 4y ago
        That's for debit cards only. Which Visa/MC have knee capped with their monopoly power so it doesn't really matter. Actually helps as a distraction

rglover 4y ago

Yes, with Bitcoin.

methodical 4y ago
And by using Bitcoin to automate all these transactions you get a bunch of very cool features such as constantly being at risk of losing your life savings due to phishing, scamming, hacking, etc., etc., etc. unless you store a hard wallet in your intestines and memorize the recovery words (better hope you don't forget any or your life savings is gone!). The cool thing about all of this is that it's a feature of Bitcoin to be able to irreversibly lose your life savings, without any ability to recoup your losses. All of this to say that Bitcoin is obviously the way forward for global transactions, despite the fact it processes transactions as slow as molasses and the only way to make it faster (Lightning Network) is to sacrifice the checks and balances that maxis praise as the hallmark of Bitcoin lol
- throwaway2037 4y ago
  This reply was excellent. This part really made me laugh: unless you store a hard wallet in your intestines and memorize the recovery words (better hope you don't forget any or your life savings is gone!) To continue the "lulz", South American drug traffickers will soon be cutting those people open to extract their hard wallet! Enough with the jokes! Real question: Sometimes you read about FBI chasing down ransomware groups and recovering Bitcoins. How do they do it? If they can identify the wallet, how do they lay claim? Do they find where the wallet is hosted and force exchange to transfer wallet to FBI? Please don't read this post as an attempt to defend Bitcoin, nor say that FBI is a good way for me to reverse a fraudulent Bitcoin transaction!
- rglover 4y ago
  > And by using Bitcoin to automate all these transactions you get a bunch of very cool features such as constantly being at risk of losing your life savings due to phishing, scamming, hacking, etc., etc. All lies. > unless you store a hard wallet in your intestines and memorize the recovery words (better hope you don't forget any or your life savings is gone!) Lies. Just write them down and store them securely. You can memorize them if you like. It's also wise to store multiple physical copies in various locations to avoid this exact scenario. > The cool thing about all of this is that it's a feature of Bitcoin to be able to irreversibly lose your life savings, without any ability to recoup your losses. Yes, you can't be utterly careless (and I'm not sure what the argument is for wanting to be). > the only way to make it faster (Lightning Network) is to sacrifice the checks and balances that maxis praise as the hallmark of Bitcoin Yes, which makes sense for small transactions between trusted parties. Large transactions can and should be done on-chain (also with trusted parties). -- I'll continue to listen to the signal [1], not the noise. What makes me happiest is that the people who deserve to win the most will win over the people who deserve it the least. It will be the greatest wealth transfer humanity has ever seen and it won't require any violence or coercion. [1] https://twitter.com/LightningTipB0t/status/1615014798797991938 https://twitter.com/LightningTipB0t/status/16150147987979919...