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Visa to acquire Brazilian startup Pismo for $1B
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- seydor 3y agowhat s the role of visa in a world where CBDCs will exist?
- The28thDuck 3y agoThere is value in stable asset management. I don’t foresee a future where credit-based systems are superseded by something else.
- MrPatan 3y agoCredit? It's the (non central)bank accounts what lose meaning, imo
- seydor 3y agovisa does not issue the credit (or the cards)
- parl_match 3y agoA bunch: - internetwork payments - interbank payments - fraud prevention and insurance layer - retail consumer debt underwriting - payments infrastructure and endpoint standards, security, and deployment CBDCs do take away a fair amount of responsibility from existing private EFT, and I personally think can be a net positive, but they're a piece of the puzzle.
- josh2600 3y agoHard agree. CBDCs are a substrate. There will always be integrations to the substrate. Ideally protocols are as simple as possible and applications utilize them to build bespoke services. If the protocol itself is too customizable it becomes extremely difficult to interop.
- parl_match 3y agoAnother thing that people often get wrong is that they think of these financial systems as "just" services. There's a lot of human work involved.
- seydor 3y agointerbank and internetwork are not really needed with Cbdcs right? I assume that banks will take care of fraud prevention , and payments infrastructure will not be cards but an app?
- coldcache 3y agoDo you mean insofar as people will be able to pay without carrying cash or using a credit card? I assume reasons will be similar to why many prefer credit cards to debit cards: cash flow issues, extra fraud protections, creating a credit history for future loans, rewards points, etc. The value of debit cards will be significantly diminished, though.
- seydor 3y agoyes that s my point. Also CBDCs will be much easier for micropayments and things that VISA does not allow in their network
- notatoad 3y ago"a world where CBDCs will exist" could also be phrased as "a world where CBDCs do not yet exist".
- aidenn0 3y agoHow do CBDCs handle payment disputes? Aside from credit, that's a big value of a card.
- redleader55 3y agoOne could argue that payment disputes are an artifact of credit cards. Before that there was no way to say "I don't like the product that I got, or it didn't arrive in time, so I'm cancelling the order". Once money changed hands, it was a done deal.
- aidenn0 3y agoThere were totally payment disputes with cash. It just might involve either lawyers or a heavy blunt object, or when less contentious a third party might even mediate. "You didn't give me what I paid for" and "You didn't pay me for what I gave you" are fundamental parts of any purchase.
- dragonwriter 3y ago> One could argue that payment disputes are an artifact of credit cards. One could, but one would look very silly doing so, since documented payment disputes (in court records, among other places) are much older than credit cards. > One could argue that payment disputes are an artifact of credit cards. Yes, there was. Contracts, including sales contracts, where payment was in whole or in part conditioned on delivery or other performance long predate credit cards, as do disputes over whether the good delivery or other performance was provided and whether payment must be made. As were, on the other hand, contracts where payment came first, and then later disputes over whether delivery or performance would occur and there would be disputes over whether payment made in advance must be refunded. And, even without payment and delivery being separated in time, you can have payment disputes because whether the goods (or the instruments provided as payment) were as specified may become a dispute after both sides have exchanged and tentatively concluded the trade. The idea that payment disputes didn’t exist before the fairly recent invention of credit cards is…amusing.
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- pbreit 3y agoMaybe smaller. Maybe larger. But that's a big assumption that CBDCs will exist on a broad basis anytime soon (or ever).
- genocidicbunny 3y agoBegging the question a bit aren't we with the assumption that CBDCs will exist?
- toolz 3y agoYeah, I struggle to see how a government convinces a population that they should switch to a currency where every penny they spend can be traced.
- Arch485 3y agoThat's how the current system works unless you use physical cash or something like Monero (but even in those cases, it's not guaranteed to be untraceable). A CBDC just takes all the BS of having many different systems to process payments, manage bank accounts, etc. etc. and unifies it under one system. Implying that "every penny" cannot be traced with the current systems we have is a misnomer.
- toolz 3y agoI'll go further than implying every penny can't be traced in the current system to stating it as a matter of fact. The default for cash is that it isn't traced. There are plenty of nit-picky exceptions, but I know for a fact that I or anyone else can transact in complete privacy with cash if we take the most minimal of precautions. If in fact the current system can trace every penny then our governing officials have a lot of explaining to do as to why human trafficking still happens with USD transactions.
- seydor 3y agoit s still a counterfactual question
- Etheryte 3y agoFor context, CBDC stands for central bank digital currency, e.g. https://www.dnb.nl/en/innovations-in-payments-and-banking/digital-euro-what-why-and-how/ https://www.dnb.nl/en/innovations-in-payments-and-banking/di...
- pbarnes_1 3y agoTech is never the hard part in payments.
- grantsch 3y agoDude do you not have a credit or debit card? Seriously asking
- lmm 3y agoFrom other comments here it sounds like Brazil's central bank offers a system that is replacing credit and debit cards for many use cases. I take that to be their point.
- brodock 3y agoBrazil unbanked population in 2011 was ~41%. Having a bank account was not a straightforward process and included higher costs for the vast majority of the population. Having a bank account would normally means you get a card that could only withdraw money from an ATM. If you wanted a "debit" card that would cost more. Credit card were something out of reach for many. Low income folks alternative for credit were to rely on general stores own credit bureau. With the liberalization in the banking system and the many fintechs that disrupted the market, the unbanked number droped to a single digit in 2021, and with pix, many just skipped the debit card all together. [1]: https://www.statista.com/statistics/1370626/access-to-financial-services-in-brazil/ https://www.statista.com/statistics/1370626/access-to-financ...
- rafaelturk 3y agoMy take this is all about OpenPix
- toomuchtodo 3y agoInstant payment networks are an existential crisis for legacy debit and credit rails/networks. Have to go upmarket to value add when you can’t get interchange revenue (in this case, buying an emerging interface to Pix, Brazil’s instant payment system). > Pismo’s platform will also enable Visa to provide support and connectivity for emerging payment rails, like Pix in Brazil, for financial institution clients. https://en.wikipedia.org/wiki/Pix_(payment_system) https://en.wikipedia.org/wiki/Pix_(payment_system) https://news.ycombinator.com/item?id=36012262 https://news.ycombinator.com/item?id=36012262
- dmix 3y agoIs this basically like Interac Email Transfers that's been in Canada forever? With more mobile-friendly UIs?
- nidnogg 3y agoWell, I'm not sure about Interac Email Transfers as I have not used it. But I have not seen something change up finances here in Brazil as fast like Pix during my life - it's extremely flexible and efficient. The rollout was structured in a way that pretty much every single bank in the country started taking up Pix payments with no friction, so you can send money to almost everywhere. Aside from that, you can setup emails, mobile phones, random hashes, and Brazilian ID numbers as Pix keys to transfer to and fro. And yeah well, the mobile-friendly UI is a thing because most bank apps here have abysmal desktop UIs and I would go as far as saying they have (pretty much) given up on developing those to focus on the mobile user base instead.
- greiskul 3y agoAs a Brazilian that moved to Canada, and used both systems. Pix is way more advanced than Interac. The UX is better, the adoption is way higher. I have paid cab drivers in Brazil with Pix, since transfers are instant. It is used by MANY as a substitute for cash. With Interact, there is a time delay sometimes, which makes it not work that well for live payments like this. There are also more use cases covered. Instead of you having to type all the info of you are paying, they can print out a code for you, with the value/their info. So you can just copy/paste/read qr code. This allows business to use Pix to handle internet payments very easy, during checkout, they just generate a Pix code, that you pay and it confirms your payment in a couple of seconds. It is also something that the Central Bank of Brazil setup, so there is no profit motif except for fees charged only to business that use it, to cover operating costs. Every single bank that I'm aware of in Brazil quickly implemented it.
- xyst 3y agoVisa just gobbling up all of their domestic and foreign competitors
- hashtag-til 3y agoIf (big if) authorities agree.
- soneca 3y agoSeems a very small if to me. Do you have any more context about being something the authorities would not like?
- justahuman74 3y agoWill the government of Brazil like this?
- soneca 3y agoIt doesn’t seem of minimal relevancy for the Brazilian government. I don’t see the connection at all. What’s your reasoning to consider that might be one?
- tflinton 3y agoThe last large company Visa attempted to purchase (Plaid) got shutdown by the DoJ for antitrust issues.
- mastazi 3y agoSome people in the comments are implying that Visa is acquiring a competitor. But Pismo is a core banking & issuer-processor API vendor, not a Visa competitor. Competitors of Pismo would be companies like Episode Six or Paymentology. Through this acquisition, Visa is expanding their offering to include core banking and issuer-processor APIs, so they are doing vertical integration.
- dredmorbius 3y agoMonopolies may be horizontal, vertical, or both.
- mattfrommars 3y agoI always wondered how do folks start companies to built integration with banks and provide APIs. Where does one even start? The only way I see is to stumble across someone who works in bank? If bank, has to be beyond a bank teller.
- __MatrixMan__ 3y agoI once spent a month shopping around for such a thing. My team made a big analysis spreadsheet and we went through the various API's with a fine tooth comb and presented our top three to leadership. They subsequently went with one we had never heard of. Rumor had it that it was owned by somebody on the board. So that's n=1, corruption 100% of the time.
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- techopoly 3y agoSimple answer: work for a bank.
- Nextgrid 3y agoThat is pretty much the case for any legacy industry, not just banking. It's 30% engineering, 70% actually knowing someone who will let your engineers anywhere near the data source. In some cases regulations like PSD2 give you a "shortcut", but even then it's a sham because in practice the APIs you're given are dysfunctional and you will have to spend significant efforts making up for the shortcomings of the API (in some cases it's insane things like blatantly violating both the specification and even common sense, such as settled bank transactions outright disappearing without a corresponding reversal transaction).
- carlossouza 3y agoExactly. I started one. 2 of my cofounders had 15+ years (each) of experience in Credit Suisse and Santander. They knew everything and everyone. Without them, it would be pretty hard to validate the idea (and basically impossible to sell). The legal stuff is unbelievable...
- bilekas 3y agoSad to see a Brazilian company who offered so many jobs being forked out. They have unbelievable talent in Brazil. I've fought my manager to hire a good one from Brazil. They have an unbelievable wealth of amazing education, add to that a strong reason to want to be successful. I've worked and hired a lot of people over the years, of all of them; Brazilians were the best, they know what they're doing, in our office at the time that let everyone to relax and enjoy. If you don't know what you're doing. You're fired. End of. Used to love that office. We got work done while having fun. Count the UN, more or less was there. Everything was delivered quick and mostly always above that spec, because they 'understood' it better. 10 / 10 End of the day : They have an insane education system, it's good but maybe too aggressive. (look to the law exam). They know how to study. Lookup the law exam. It's rough. Edit: If you're poor in Brazil, options are limited. Coding is an EXIT point, that can lead to better. Downvote please comment.
- raverbashing 3y ago> Lookup the law exam. It's rough. There's nothing too special about it, quite the contrary, you could say it's the "bare minimum"
- talldatethrow 3y agoI appreciate you saying Brazilians were the best of those youve worked with. Which nationality was the worst?
- hayd 3y agoNot a downvoter... this comment comes off quite nationalistic and, more importantly, is there evidence they are being "fork out"? My understanding, from conversations with business school leader in the UK, is that South America is where the expertise is in the cutting edge of finance. Assuming that visa are acquiring competition for $1b to kill it or on-shore the workforce seems an odd take.
- ccooffee 3y ago> [Brazil has] an insane education system, it's good but maybe too aggressive. Richard Feynman had a not-so-positive view of the Brazillian education system, which he summarized with "no science is being taught in Brazil!"[0]. Granted, his view was based on personal experience around half a century ago, so everything may have changed since then (possibly even due to Feynman's influence). > Lookup the law exam. It's rough. I'm having a hard time finding comprehensive resources here. I've found bits and pieces that make it seem...not that scary. 80 multiple choice questions where 40 correct is a pass, and then a few essays. A 2022 article[1] states that some prestigious law programs have bar passing rates near 80% while the average pass rate is closer to 30%. American states have per-state bar exams, with average pass rates in 2023 ranging from 31% (Alabama) to Alaska (75%) [2]. Is the difficulty of the exam not easily represented in statistics? [0] https://v.cx/2010/04/feynman-brazil-education https://v.cx/2010/04/feynman-brazil-education [1] https://portal.fgv.br/en/news/20-years-revolution-brazilian-legal-education-fgv-students-have-highest-brazilian-bar https://portal.fgv.br/en/news/20-years-revolution-brazilian-... [2] https://www.ncbex.org/statistics-research/bar-exam-results-jurisdiction https://www.ncbex.org/statistics-research/bar-exam-results-j...
- SQLoveR 3y ago[dead]
- WhereIsTheTruth 3y agoThis should not be allowed, Visa trying to buy their way in to maintain their global dominance.. What Lula's team doing? Certainly not protecting their own interests Huge loss for Brazil and South America
- lannisterstark 3y ago? This is not, nor has it ever been a competition. They provide APIs for the banking sector. You should actually look stuff up first before an immediate reaction.
- WhereIsTheTruth 3y agoThat's exactly how one maintain their global dominance, they control the ecosystem and make sure their services are prioritized > You should actually look stuff up first before an immediate reaction. It's a whole different world when you choose to stay blind, what's the saying again, "ignorance is a bliss"? You perhaps are the one who should "look up things" https://www.pismo.io/blog/pismo-explores-the-future-of-cryptocurrency-with-new-deep-dive-whitepaper/ https://www.pismo.io/blog/pismo-explores-the-future-of-crypt... Digital fiat = Visa is out of business One more link for educational purpose: https://www.federalreserve.gov/central-bank-digital-currency.htm https://www.federalreserve.gov/central-bank-digital-currency... Oh, a last one to seal the deal: https://www.un.org/sites/un2.un.org/files/our-common-agenda-policy-brief-gobal-digi-compact-en.pdf https://www.un.org/sites/un2.un.org/files/our-common-agenda-...
- lannisterstark 3y agoOh it's the usual 'crypto or bust' bro. --- You should read your own links > the Federal Reserve has made no decisions on whether to pursue or implement a central bank digital currency, or CBDC, we have been exploring the potential benefits and risks of CBDCs from a variety of angles. This is a discussion paper open for comments. All US agencies publish those in the federal register regularly: https://www.federalregister.gov/ https://www.federalregister.gov/ The third link you linked is also literally a policy brief. Perhaps I shouldn't have said you should 'look stuff up,' but rather 'you should read the stuff you look up too.'
- ftxbro 3y agoif one named as pismo is a unicorn then i won't worry anymore what i will call my company
- thrawa8387336 3y agoOne could say this is just the US extending its tendrils into BRICS. Short sighted on the
- moneywoes 3y agoAre these big companies like MasterCard and Visa just running out of growth ideas in the Americas? Perhaps entrepenurs in the SU should be looking at LATAM more?
- hahhahanananana 3y ago>SU Soviet Union?
- nologic01 3y agoThe so-called developing world is leapfrogging the developed world in digital payments and digital finance. The posterchild is African mpesa but this is another example. Also Brazilian nubank is considered the only successful fintech startup. There is a point of pride and hope ofcourse, exporting API's rather than strip mining the land. Also some lessons of how established financial systems are the definition of ossification and rent extraction so zero incentive to evolve. But ultimately will all the new gadgetry help local economies thrive? This is not going to happen just because you have great "UX". Modern development at the service of old and disastrous economic ideas will only reproduce a faster, updated version of the existing system.