Hacker News Reader

Comment by ddebernardy | Hacker News Reader

The article makes very little sense.

First, not every payment requires credit cards or a need for financing.

Second, advocating the idea of cheap and frictionless credit is dubious at best; subprime loans didn't exactly end well.

Last but not least, it's unclear what you're advocating for instead of what Apple did.

Paypal, which you mention towards the end, does everything through cards and bank accounts, with the additional twist of you carrying a balance with Paypal. But they're a bank for all intents and purposes. And regulated as such, at least in Europe. Apple isn't in that business, and that's a good thing. Remember how GE or US car businesses ended up in the wake of the subprime crisis.

View on HN

To be clear - I'm arguing for frictionless payments, without the Visa or Mastercard tax.

I'm separately arguing for a competitive credit market, freed from the banks.

People are confusing the issue of multiple "virtualised credit cards" leading to more competition in the consumer credit product markets. It seems like a backwards way of thinking.

Is there anything anout Apple Pay that prevents the underlying banking infrastructure to be replaced with another model while keeping the same experience?

A credit card is just a token that represents an intermediary that both sides trust to handle the payment. Apple Pay simply abstracts that and improves the user experience, while reducing the leakage of informaition to incidental observers.

Visa/MC take very little. The bulk of the fees go to card issuers who would hate to see them dwindle. And this fee revenue now mainly goes to support rewards programs which cardholders love. At least, in the USA.

If you think about this in minimal terms, you have a merchant(pos), a purchaser/consumer, and an intermediary (though this would not be necessary for direct non-credit payments, like non-escrowed bitcoin for example). In an ideal world, a pos could publish a message like "transaction #N initiated for $X" to some "payment bus". Then the consumer would have to then publish a message like "User $Me agrees to pay $X for transaction #N".

If this were something like bitcoin, the payment could be wallet to wallet. If it were credit, some processor would have to know that they process transaction for "$Me" and find transaction #N to settle it back with the POS.

So the question really comes down to how you would implement this "payment bus". It seems like it could theoretically be something like the stock market. In fact, credit companies could be market makers and offering to settle transactions for consumers at different rates. This would have to be fast enough to be usable, but it seems like that issue is solvable with HFT solutions. But how would you get existing companies who make their own custom and profitable buses to all agree to use one generic bus and move the money making to the credit side?

> Freed from the banks

Replaced by what, the likes of PayPal? No thanks.

Just because the US banking system and Wall Street behaves like some spoiled child that shits in the kitchen and is given an award for doing so, doesn't mean the solution is an even less regulated company that operates like a bank, but isn't bound by the same rules.

> frictionless payments

Oh, nice. May I ask who bears the costs and takes the credit risk? When you pay through an intermediary such as a bank, a card issuer or PayPal, all sorts of costs and risks creep in, due to infrastructure costs, chargebacks, fraud, etc. Who takes care of the bill?

Reply on news.ycombinator.com