The very smart, very shrewd, hard-working folks at Simple tried building a new kind of bank... and found out that the business of banking is FAR more complicated than it seems. Ultimately, Simple decided it would be best to sell to a giant established bank, BBVA (USD 800 billion in assets):
The OP is a short ambitious document written by two guys who think they can do better. They think they can build a new kind of "bank for tourists." So far, they have a landing page and a mobile app: https://www.wrinq.com/ ...They will need a lot of luck.
The paper contains a lot of bullshit and I don't see any new idea in it.
Foreign transaction costs are not "prohibitive" expensive and there are CC in the US with no foreign transaction fees. You can use transferwise or WU in the worst case (just wired a buddy who is broke US$ 300 online). Social network and payments? Use Wechat!
There are three major problems that they won't be able to solve.
1. KYC regulations
2. Fraud. The financial industry makes it more difficult and more difficult to access your own money (e.g. require a receive text message to wire money. Good luck with that abroad)
3. "in multiple currencies and fast unrestricted exchange of funds within the internal banking network"
This is not a problem as long as your stay within ONE country. Use Wechat in China, use M-Pesa in Kenya etc. It becomes a problem when you do it internationally because many countries are heavily regulated and afraid that capital leaves the country. Have you made, as an average person, international transactions with China? India? Sri Lanka? Ethiopia? Good luck buddy!
In fact, even getting cash at the ATM abroad becomes more tricky. Recently I got into the habit of just carrying cash for all my travels after I run nearly out of cash twice (Ethiopia and India). What do I carry? Euros! They did not want my dollars in Ethiopia because they were "not the latest series" (remember point 2?)
The idea of posting it on hacker news is to make sure that if we can't do it someone else (better) can. There is a market. There is big money to be made. Banks are more receptive of startups than they've ever been. It'd be a shame to see this opportunity pass by.
Further we're not building a new bank. We're proposing to use the existing systems available, in any international bank today ,in a new way.
Simple was a challenger. We want to collaborate. Hacker news might just be the rabbit's foot!
We've compiled a list of questions that Banking partners,investors and startup mentors and other people have asked us in the past. If nothing else the document is a good overview of how the concept has evolved during the last couple of months. We're constantly updating the list as new questions come in. Here's the link:-
I think the article is missing an important point. Why are there foreign transaction fees in the first place? Also I think that any large service is semi doomed because of the governments in each of the countries you plan to do business in. They want to protect their own banks.
You are right about the countries wanting to protect their own banks. We're not suggesting a "savings account" in the sense that you keep your money in a foreign bank. This is more like an efficient "bank proxy". Does "nginx for banks" explain what I'm trying to say? The money at the end of the day will be kept in your own banks.
Your point about foreign transaction fees is also correct in part. There are many layers of fees in a foreign transaction, many portions of which are directly controllable by the parent bank as is already proven by services like Revolut and centtrip.
Not much can be done about the remaining charges but even the savings that can be done with the help of a parent bank are very substantial and within the bounds of regulation.
You're right, however there is a possibility it will play out like Uber. I.E. Many of the states across the globe initially fought hand and tooth to protect their own taxi license systems, only to loosen up later...
I don't like centralized versions of cryptocurrencies, but they provide the rails and on ramps to lower transaction costs. Ripple, Stellar and Tether are fascinating additions to the cryptocurrency and banking space
Tether providing stable value for settlement
I think people wouldn't come up with ideas like wrinq if they were aware of existing solutions to build on top of
And I say that as a consultant who has seen many potential founders scrap their idea, after I sign their NDA and they finally tell me about their supposedly original idea only for me to tell them the existing solutions
It's fine to be unoriginal but they scrap their idea.
Cryptocurrency is the only way to circumvent the prohibitionist laws against free exchange of money. The biggest source of inefficiency in the global economy is the organized censorship of human economic activity via state intervention, and cryptocurrency directly addresses that.
Identity on the blockchain won't actually happen if nobody actually works to make it happen. In practice, though, it's much more profitable (and easier) to build centralised businesses where you actually have a product or service to sell that only you can provide (due to network effects), so people work on that instead.
Yes both Revolut and centtrip have marketed their products to only consumers (travelers) where as the concept of multicurrency accounts is very useful to business as well. Not just individuals. The customer acquisition strategy is like Revolut but the larger goal is not (Not that I can say what they have in mind,long term).
Maybe so, but please don't post dismissive swipes to HN. It degrades conversation quality and encourages the habit of rejecting new work or new ideas.
It's true that most new work and new ideas won't amount to anything. But those that will, almost never look like they will when they're incipient. So if we don't want to trample on new things of great potential value, we have to adjust our response to all new things, including the ones that seem lame. It takes a certain discipline to practice that suspension of judgment, and we're hoping to cultivate that quality here.
No doubt. Where does the assumption come from that banks aren't aware of this market. And how on earth does one compare near lawlessness of Facebook with the most heavily regulated sector of banking. Lastly, is the author completely unaware that not all business models try to maximize "eyeballs", or customers and that some attempt simply to maximixe revenue or profit.
cs702|9 years ago
https://www.simple.com/company/the-next-chapter
The OP is a short ambitious document written by two guys who think they can do better. They think they can build a new kind of "bank for tourists." So far, they have a landing page and a mobile app: https://www.wrinq.com/ ...They will need a lot of luck.
tiatia|9 years ago
Foreign transaction costs are not "prohibitive" expensive and there are CC in the US with no foreign transaction fees. You can use transferwise or WU in the worst case (just wired a buddy who is broke US$ 300 online). Social network and payments? Use Wechat!
There are three major problems that they won't be able to solve.
1. KYC regulations
2. Fraud. The financial industry makes it more difficult and more difficult to access your own money (e.g. require a receive text message to wire money. Good luck with that abroad)
3. "in multiple currencies and fast unrestricted exchange of funds within the internal banking network"
This is not a problem as long as your stay within ONE country. Use Wechat in China, use M-Pesa in Kenya etc. It becomes a problem when you do it internationally because many countries are heavily regulated and afraid that capital leaves the country. Have you made, as an average person, international transactions with China? India? Sri Lanka? Ethiopia? Good luck buddy!
In fact, even getting cash at the ATM abroad becomes more tricky. Recently I got into the habit of just carrying cash for all my travels after I run nearly out of cash twice (Ethiopia and India). What do I carry? Euros! They did not want my dollars in Ethiopia because they were "not the latest series" (remember point 2?)
brickcap|9 years ago
Further we're not building a new bank. We're proposing to use the existing systems available, in any international bank today ,in a new way.
Simple was a challenger. We want to collaborate. Hacker news might just be the rabbit's foot!
brickcap|9 years ago
https://docs.google.com/document/d/1cu7vl4GiQHg8Tqqt_nGj7JOT...
brickcap|9 years ago
- The low hanging fruits in corporate banking services (https://docs.google.com/document/d/11SRXfuC0-L5iGlHypnviI9H5...)
- A scalable banking proxy (https://docs.google.com/document/d/11SRXfuC0-L5iGlHypnviI9H5...)
jtchang|9 years ago
brickcap|9 years ago
Your point about foreign transaction fees is also correct in part. There are many layers of fees in a foreign transaction, many portions of which are directly controllable by the parent bank as is already proven by services like Revolut and centtrip.
Not much can be done about the remaining charges but even the savings that can be done with the help of a parent bank are very substantial and within the bounds of regulation.
schappim|9 years ago
amelius|9 years ago
cloudjacker|9 years ago
Tether providing stable value for settlement
I think people wouldn't come up with ideas like wrinq if they were aware of existing solutions to build on top of
And I say that as a consultant who has seen many potential founders scrap their idea, after I sign their NDA and they finally tell me about their supposedly original idea only for me to tell them the existing solutions
It's fine to be unoriginal but they scrap their idea.
bachback|9 years ago
aminok|9 years ago
vertex-four|9 years ago
easytiger|9 years ago
Doesn't know anything about retail banking if you are reusing that term
datahack|9 years ago
brickcap|9 years ago
vidarh|9 years ago
https://en.wikipedia.org/wiki/Bank_Norwegian
tiatia|9 years ago
Many major companies have their own banks and even insurances. An insurance is an easily available tax shelter.
brickcap|9 years ago
Cypher|9 years ago
neximo64|9 years ago
pja|9 years ago
dang|9 years ago
It's true that most new work and new ideas won't amount to anything. But those that will, almost never look like they will when they're incipient. So if we don't want to trample on new things of great potential value, we have to adjust our response to all new things, including the ones that seem lame. It takes a certain discipline to practice that suspension of judgment, and we're hoping to cultivate that quality here.
JustUhThought|9 years ago