4 ms·

1) The government grants a de facto monopoly through excessive regulation and licensing requirements. 2) People love credit cards and buying shit they can't af

1) The government grants a de facto monopoly through excessive regulation and licensing requirements. 2) People love credit cards and buying shit they can't afford.

Osiris 14y ago
Credit cards can simply be a convenience. I pay off my cards every month but I use them so I don't have to carry cash and for ease of transactions. I know that Dwolla is trying to get into this by allowing transactions directly from bank accounts (no credit) with very low fees ($0.25/transaction).
- cookiecaper 14y ago
  Dwolla, like all online banking startups dealing with real money, is just a front-end on a classical banking institution. The costs to really start your own bank, which itself would probably not even give the level of control desired, from scratch are far too excessive for a typical startup. All of Dwolla's stuff is processed by Veridian Credit Union, and they have no control after you start a transaction moving. Dwolla takes 2+ weeks to move money around. Their FiSync product is vaporware. They won't give out the documentation. Veridian, whose system they're already specially linked to, is the only user.
- ryguytilidie 14y ago
  But that addresses one of the many costs, interest payments for the consumer. It doesn't address merchant costs through the percentage the cc company takes for card transactions and it doesn't address companies dealing with chargebacks.
jrockway 14y ago
2) People love credit cards and buying shit they can't afford. Actually, I like the abstraction layer. I don't even have the ability to carry a balance on my credit card: every month, the balance is due in full. In exchange, I'm spending the bank's money, so if there's a problem, it's their money that's gone, and they pay their lawyers to get it back. (And I get "rewards", but I know I'm just paying for those myself.) Interestingly, I use my brokerage for checking, and they let me write checks to borrow against the securities in my account. So checks can be borrowing money, and credit cards might not be. Some people might like borrowing money, but I like credit cards because they are very convenient and easy to use.
- sliverstorm 14y ago
  I'm also on board with credit cards for the abstraction. Doesn't matter what bank or brokerage which of my funds are in. Also, although the gains are pretty trivial, I find it satisfying to leverage the grace period.
cookiecaper 14y ago
> 1) The government grants a de facto monopoly through excessive regulation and licensing requirements. This is a HUGE problem. The oligopoly that runs banking now is never going to innovate in certain ways because its contrary to their profit incentive, because they have no competitors willing to implement better feature sets (because newcomers are basically disallowed). Our currency is hard linked to banking processes. There are some things that are nearly impossible to extract even if we do get competition going (which won't happen). The only way out of this is something like Bitcoin and/or total collapse of today's banking system.

1) The government grants a de facto monopoly through excessive regulation and licensing requirements. 2) People love credit cards and buying shit they can't afford.

Osiris 14y ago

Credit cards can simply be a convenience. I pay off my cards every month but I use them so I don't have to carry cash and for ease of transactions. I know that Dwolla is trying to get into this by allowing transactions directly from bank accounts (no credit) with very low fees ($0.25/transaction).

cookiecaper 14y ago
Dwolla, like all online banking startups dealing with real money, is just a front-end on a classical banking institution. The costs to really start your own bank, which itself would probably not even give the level of control desired, from scratch are far too excessive for a typical startup. All of Dwolla's stuff is processed by Veridian Credit Union, and they have no control after you start a transaction moving. Dwolla takes 2+ weeks to move money around. Their FiSync product is vaporware. They won't give out the documentation. Veridian, whose system they're already specially linked to, is the only user.
ryguytilidie 14y ago
But that addresses one of the many costs, interest payments for the consumer. It doesn't address merchant costs through the percentage the cc company takes for card transactions and it doesn't address companies dealing with chargebacks.

jrockway 14y ago

2) People love credit cards and buying shit they can't afford. Actually, I like the abstraction layer. I don't even have the ability to carry a balance on my credit card: every month, the balance is due in full. In exchange, I'm spending the bank's money, so if there's a problem, it's their money that's gone, and they pay their lawyers to get it back. (And I get "rewards", but I know I'm just paying for those myself.) Interestingly, I use my brokerage for checking, and they let me write checks to borrow against the securities in my account. So checks can be borrowing money, and credit cards might not be. Some people might like borrowing money, but I like credit cards because they are very convenient and easy to use.

sliverstorm 14y ago
I'm also on board with credit cards for the abstraction. Doesn't matter what bank or brokerage which of my funds are in. Also, although the gains are pretty trivial, I find it satisfying to leverage the grace period.

cookiecaper 14y ago

> 1) The government grants a de facto monopoly through excessive regulation and licensing requirements. This is a HUGE problem. The oligopoly that runs banking now is never going to innovate in certain ways because its contrary to their profit incentive, because they have no competitors willing to implement better feature sets (because newcomers are basically disallowed). Our currency is hard linked to banking processes. There are some things that are nearly impossible to extract even if we do get competition going (which won't happen). The only way out of this is something like Bitcoin and/or total collapse of today's banking system.