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The likes of Swipe, Venmo, Revolut, Wise etc. should get together and establish a new online payment standard they control, completely outside the reach of the

The likes of Swipe, Venmo, Revolut, Wise etc. should get together and establish a new online payment standard they control, completely outside the reach of the credit card companies. The fees could be near zero and they would still cover the actual costs of running the infrastructure. It's incredible this day and age I have a more intuitive, user friendly and secure payment workflow for crypto - just scan a QR code - while for fiat payments I have to jump through hoops, manually copy static numbers and worry that someone else might steal and abuse the static password that secures access to my own money.

dylan604 3y ago
anyone trusting QR codes as the sole gatekeeper to financial transactions is just not being honest with the real world
- ensignavenger 3y ago
  You don't trust the QR code, all that is is information (a public key, for example). You are trusting the underlying software. (Which in crypto, isn't always the best idea either).
- cqqxo4zV46cp 3y ago
  The comment contains the words “crypto” and “fiat”. It should be obvious that it’s head-in-the-clouds thinking.
- whimsicalism 3y ago
  works fine in china
- Sohcahtoa82 3y ago
  A QR code is nothing more than an encoded string of text. I would expect that if there was a "scan this QR code to pay" system, that the app you're using to pay would show you the amount about to be charged and that you would have to approve it. I don't see anything wrong with it.
  - dylan604 3y ago
    All it does is to take you to a website allowing you to enter payment credentials. If this website is not the website you think it is and is instead some fraudulent website made to impersonate a site you are familiar with, then a large portion of users will not question it.
    - whimsicalism 3y ago
      wrong - qr codes do not always take you to a website
      - pests 3y ago
        I think he means his crypto service, which does use URLs in QR codes. If you scanned one and it wanted to add a contact or something then it's obviously fake right?
      - dylan604 3y ago
        oh joy, if we're now going to debate all of the uses of a qr code, then count me out. in fact, i'm pretty much done with your account altogether at this point.
    - Sohcahtoa82 3y ago
      There's nothing about QR codes that necessitates what you're talking about. Apple Pay and Google Pay could have easily worked using QR codes rather than NFC. The cash register would just need a QR code that was an encoded JSON payload that included the amount to be charged, a merchant name, and a merchant ID. You'd scan it using your chose payments app and the app would say something like "You're about to pay $13 to Bob's Burgers. Approve?" and you click Yes and you're done.
dfxm12 3y ago
Pulling cash out of your wallet and putting change back in it isn't something I'd describe as "hoops". manually copy static numbers and worry that someone else might steal and abuse the static password that secures access to my own money. I'm not sure what this has to do with fiat currency.
- deathanatos 3y ago
  > I'm not sure what this has to do with fiat currency. Just read their reply as "traditional payment methods". Nothing really protects credit/debit card transactions, the security of which is basically the emperor isn't wearing clothes. I'd even say the security to directly access my bank via customer support relies on obvious, basically public, identifiers that to me seem somewhat trivial for a potential attacker to socially engineer. … parent's "solution" does strike me a bit like "meet the new boss, same as the old boss", though.
- whimsicalism 3y ago
  carrying cash is obviously annoying, credit cards are popular because they are much easier duh?
  - TheRealPomax 3y ago
    It feels like this comment is based on not realizing that debit cards are normal things in many parts of the world, where just because you don't want to use a credit card, you don't need to use cash. You already have a bank account, and your bank already knows how to talk to literally any other bank, because by law they have to all talk the same protocols, so you can just use your bank card to pay for everything, anywhere. No need for cards from private companies like Visa or Mastercard that saw a failed banking system and went "Let us fill that niche, it'll be so convenient! For a large fee, of course". And it really is a failed banking system: the fact that Interac in North America was able to go "hey we 'invented' EFT and got your bank to sign onto that, because they refuse to directly talk to other banks so you can't move money from one account to another. It'll only cost you a dollar each time!" is just insane.
ensignavenger 3y ago
Perhaps they should... but its not like it hasn't been done before, MasterCard started out as a cooperative owned by financial institutions. Before its IPO, it has over 25,000 members. They still charged high interchange fees. I think attacking it from a different angle- a payment network owned by the merchants (as a cooperative) themselves, would be a better bet. Merchants used to lend money to their customers on account all the time, it makes sense for them to return to their roots and issue their own cards, that work on their own network (for interoperability).
Analemma_ 3y ago
The reason you have to jump through tons of hoops for fiat payments is that laws and regulations require that payments be traceable and reversible, which requires a whole system of middlemen and arbitraging of credit risk. To the extent that crypto does not require these things yet, it's only because not enough grandmothers are using it to pay for their groceries. But make no mistake: no matter how much crypto people insist that transaction irreversibility is a feature, the general public thinks it's a bug and will demand change when the elderly get scammed out of their retirement savings with no recourse possible. Crypto cannot both a) remain free of these hoops and b) get used for mainstream payments; you have to pick one.
- cqqxo4zV46cp 3y ago
  Yep. Anyone peddling cryptocurrencies as a legitimate replacement for traditional State-controlled fiat currencies WITHOUT a meaty protection layer on top is at this point delusional. You think that you’re selling a technological replacement but you’re actually selling a whole suite of financial deregulation that frankly society hasn’t been begging for, and these people will more often than not take it as a given that the general public agrees with their libertarian view.
- KennyBlanken 3y ago
  Not to mention most crypto transactions are so ludicrously computationally expensive that they could not scale to the volumes the credit card networks handle. I don't mean "it would be uneconomical", I mean the level of power required would present national infrastructure challenges if not be outright impossible.
  - whimsicalism 3y ago
    not true at least for modern l2s
- whimsicalism 3y ago
  wish there was some way to split it out into non-easily reversible payments and insurance to make you whole for fraud at least to incentivize people through premiums to make it a little harder for their information to be stolen so that we as a society don’t have to pay higher fees collectively
azinman2 3y ago
I don’t know why you’re being downvoted. Just look at China for an example where this is working. I think you’re absolutely right, and pull in some major merchants (Amazon?) to move the market. That said visa/mastercard may have agreements that prevent this. If I were Amazon and interested in the long game I’d try to sue them for anti-competitive/monopoly status and remove that contingency. What’s crazy is how we have a 2-3% inflation that could go away without these fees, and that’s not part the discussion on larger inflation.
- potamic 3y ago
  As does for India's state sanctioned network. Processes 400M transactions a day at a meagre operating revenue of 0.5M USD but still at a 40% profit margin! The card industry has been gouging the world for decades now.
- dylan604 3y ago
  Walmart and a few other retailers tried to launch a qr code based payment system to directly challenge ApplePay. It took off like a lead balloon. The ApplePay system was so much more elegant and convenient than having to open an app, scan a qr code, confirm payment. Most of the stores that originally rejected ApplePay in hopes of the Walmart backed system are now happily accepting ApplePay.
  - cornholio 3y ago
    The issue here are online payments, where NFC is either not available (payment is initiated on the desktop, while the payment app is mobile) or not necessary (payment is initiated on the same device that handles authorization). There is no way to disrupt NFC payments and no need to - they are already secure, user friendly and can be used by any other major payment provider which gathers the critical mass.
kansface 3y ago
> The fees could be near zero and they would still cover the actual costs of running the infrastructure. I believe the infra is cheap while fraud is expensive.
- cornholio 3y ago
  MasterCard and Visa do not directly offer any fraud protection, at least not in the 1-3% fee. The cost of fraud and prevention of fraud is born entirely by the merchants, and eventually, through higher prices, by the consumers. What's even more damning is that the online payment flow is a retrofit over outdated and vulnerable technology. Payment fraud could be eliminated almost entirely by a new payment system design. The credit card companies are simply massive and slow monopolists begging to be disrupted, that nobody has the capital and courage to attack.
  - s_dev 3y ago
    >MasterCard and Visa do not directly offer any fraud protection Who pays for the chargeback dispute process?
  - kayodelycaon 3y ago
    They don't offer fraud protection, but still track and deal with fraud on their own network. They have to deal with international laws. They can and will decline transactions or cancel cards. They keep track of how merchants are being used. A company I've worked for has the letters to prove it. You do not want to get a certified mail envelope from MasterCard (not a merchant or bank, MasterCard) containing a letter with a short deadline. Needless to say, shit got fixed. Quickly.
  - Workaccount2 3y ago
    I have been dreaming of it for a while, but the capital requirements are so insane that it could really only be backed by a bank. A bank who probably likes the status quo right now. Paradoxically the more popular your service, the harder it becomes to get it off the ground, as you need to put up potentially tens to hundreds of billions a month to cover the credit issued. Couple this with the fact that interest rates are so high right now, that you would also likely get impaled on the interest of any loans you took. Maybe ask for favorable terms from merchants, but then you are reliant on the wolves to bring a better life to the sheep. So frustrating.
kaynelynn 3y ago
In addition to what others have said, it’s also a tricky cold start problem to get enough car issuers, users, and merchants on board. As far as I can tell (mostly from Acquired episodes linked in a separate comment), Block with Cash app / cash app pay and Apple with Apple Pay, and maybe PayPal are the main contenders that have a shot at competing with the network effects.

dylan604 3y ago

anyone trusting QR codes as the sole gatekeeper to financial transactions is just not being honest with the real world

ensignavenger 3y ago
You don't trust the QR code, all that is is information (a public key, for example). You are trusting the underlying software. (Which in crypto, isn't always the best idea either).
cqqxo4zV46cp 3y ago
The comment contains the words “crypto” and “fiat”. It should be obvious that it’s head-in-the-clouds thinking.
whimsicalism 3y ago
works fine in china
Sohcahtoa82 3y ago
A QR code is nothing more than an encoded string of text. I would expect that if there was a "scan this QR code to pay" system, that the app you're using to pay would show you the amount about to be charged and that you would have to approve it. I don't see anything wrong with it.
- dylan604 3y ago
  All it does is to take you to a website allowing you to enter payment credentials. If this website is not the website you think it is and is instead some fraudulent website made to impersonate a site you are familiar with, then a large portion of users will not question it.
  - whimsicalism 3y ago
    wrong - qr codes do not always take you to a website
    - pests 3y ago
      I think he means his crypto service, which does use URLs in QR codes. If you scanned one and it wanted to add a contact or something then it's obviously fake right?
    - dylan604 3y ago
      oh joy, if we're now going to debate all of the uses of a qr code, then count me out. in fact, i'm pretty much done with your account altogether at this point.
  - Sohcahtoa82 3y ago
    There's nothing about QR codes that necessitates what you're talking about. Apple Pay and Google Pay could have easily worked using QR codes rather than NFC. The cash register would just need a QR code that was an encoded JSON payload that included the amount to be charged, a merchant name, and a merchant ID. You'd scan it using your chose payments app and the app would say something like "You're about to pay $13 to Bob's Burgers. Approve?" and you click Yes and you're done.

dfxm12 3y ago

Pulling cash out of your wallet and putting change back in it isn't something I'd describe as "hoops". manually copy static numbers and worry that someone else might steal and abuse the static password that secures access to my own money. I'm not sure what this has to do with fiat currency.

deathanatos 3y ago
> I'm not sure what this has to do with fiat currency. Just read their reply as "traditional payment methods". Nothing really protects credit/debit card transactions, the security of which is basically the emperor isn't wearing clothes. I'd even say the security to directly access my bank via customer support relies on obvious, basically public, identifiers that to me seem somewhat trivial for a potential attacker to socially engineer. … parent's "solution" does strike me a bit like "meet the new boss, same as the old boss", though.
whimsicalism 3y ago
carrying cash is obviously annoying, credit cards are popular because they are much easier duh?
- TheRealPomax 3y ago
  It feels like this comment is based on not realizing that debit cards are normal things in many parts of the world, where just because you don't want to use a credit card, you don't need to use cash. You already have a bank account, and your bank already knows how to talk to literally any other bank, because by law they have to all talk the same protocols, so you can just use your bank card to pay for everything, anywhere. No need for cards from private companies like Visa or Mastercard that saw a failed banking system and went "Let us fill that niche, it'll be so convenient! For a large fee, of course". And it really is a failed banking system: the fact that Interac in North America was able to go "hey we 'invented' EFT and got your bank to sign onto that, because they refuse to directly talk to other banks so you can't move money from one account to another. It'll only cost you a dollar each time!" is just insane.

ensignavenger 3y ago

Perhaps they should... but its not like it hasn't been done before, MasterCard started out as a cooperative owned by financial institutions. Before its IPO, it has over 25,000 members. They still charged high interchange fees. I think attacking it from a different angle- a payment network owned by the merchants (as a cooperative) themselves, would be a better bet. Merchants used to lend money to their customers on account all the time, it makes sense for them to return to their roots and issue their own cards, that work on their own network (for interoperability).

Analemma_ 3y ago

The reason you have to jump through tons of hoops for fiat payments is that laws and regulations require that payments be traceable and reversible, which requires a whole system of middlemen and arbitraging of credit risk. To the extent that crypto does not require these things yet, it's only because not enough grandmothers are using it to pay for their groceries. But make no mistake: no matter how much crypto people insist that transaction irreversibility is a feature, the general public thinks it's a bug and will demand change when the elderly get scammed out of their retirement savings with no recourse possible. Crypto cannot both a) remain free of these hoops and b) get used for mainstream payments; you have to pick one.

cqqxo4zV46cp 3y ago
Yep. Anyone peddling cryptocurrencies as a legitimate replacement for traditional State-controlled fiat currencies WITHOUT a meaty protection layer on top is at this point delusional. You think that you’re selling a technological replacement but you’re actually selling a whole suite of financial deregulation that frankly society hasn’t been begging for, and these people will more often than not take it as a given that the general public agrees with their libertarian view.
KennyBlanken 3y ago
Not to mention most crypto transactions are so ludicrously computationally expensive that they could not scale to the volumes the credit card networks handle. I don't mean "it would be uneconomical", I mean the level of power required would present national infrastructure challenges if not be outright impossible.
- whimsicalism 3y ago
  not true at least for modern l2s
whimsicalism 3y ago
wish there was some way to split it out into non-easily reversible payments and insurance to make you whole for fraud at least to incentivize people through premiums to make it a little harder for their information to be stolen so that we as a society don’t have to pay higher fees collectively

azinman2 3y ago

I don’t know why you’re being downvoted. Just look at China for an example where this is working. I think you’re absolutely right, and pull in some major merchants (Amazon?) to move the market. That said visa/mastercard may have agreements that prevent this. If I were Amazon and interested in the long game I’d try to sue them for anti-competitive/monopoly status and remove that contingency. What’s crazy is how we have a 2-3% inflation that could go away without these fees, and that’s not part the discussion on larger inflation.

potamic 3y ago
As does for India's state sanctioned network. Processes 400M transactions a day at a meagre operating revenue of 0.5M USD but still at a 40% profit margin! The card industry has been gouging the world for decades now.
dylan604 3y ago
Walmart and a few other retailers tried to launch a qr code based payment system to directly challenge ApplePay. It took off like a lead balloon. The ApplePay system was so much more elegant and convenient than having to open an app, scan a qr code, confirm payment. Most of the stores that originally rejected ApplePay in hopes of the Walmart backed system are now happily accepting ApplePay.
- cornholio 3y ago
  The issue here are online payments, where NFC is either not available (payment is initiated on the desktop, while the payment app is mobile) or not necessary (payment is initiated on the same device that handles authorization). There is no way to disrupt NFC payments and no need to - they are already secure, user friendly and can be used by any other major payment provider which gathers the critical mass.

kansface 3y ago

> The fees could be near zero and they would still cover the actual costs of running the infrastructure. I believe the infra is cheap while fraud is expensive.

cornholio 3y ago
MasterCard and Visa do not directly offer any fraud protection, at least not in the 1-3% fee. The cost of fraud and prevention of fraud is born entirely by the merchants, and eventually, through higher prices, by the consumers. What's even more damning is that the online payment flow is a retrofit over outdated and vulnerable technology. Payment fraud could be eliminated almost entirely by a new payment system design. The credit card companies are simply massive and slow monopolists begging to be disrupted, that nobody has the capital and courage to attack.
- s_dev 3y ago
  >MasterCard and Visa do not directly offer any fraud protection Who pays for the chargeback dispute process?
- kayodelycaon 3y ago
  They don't offer fraud protection, but still track and deal with fraud on their own network. They have to deal with international laws. They can and will decline transactions or cancel cards. They keep track of how merchants are being used. A company I've worked for has the letters to prove it. You do not want to get a certified mail envelope from MasterCard (not a merchant or bank, MasterCard) containing a letter with a short deadline. Needless to say, shit got fixed. Quickly.
- Workaccount2 3y ago
  I have been dreaming of it for a while, but the capital requirements are so insane that it could really only be backed by a bank. A bank who probably likes the status quo right now. Paradoxically the more popular your service, the harder it becomes to get it off the ground, as you need to put up potentially tens to hundreds of billions a month to cover the credit issued. Couple this with the fact that interest rates are so high right now, that you would also likely get impaled on the interest of any loans you took. Maybe ask for favorable terms from merchants, but then you are reliant on the wolves to bring a better life to the sheep. So frustrating.

kaynelynn 3y ago

In addition to what others have said, it’s also a tricky cold start problem to get enough car issuers, users, and merchants on board. As far as I can tell (mostly from Acquired episodes linked in a separate comment), Block with Cash app / cash app pay and Apple with Apple Pay, and maybe PayPal are the main contenders that have a shot at competing with the network effects.