US debit business is likely replaced with Fed instant payments in 2-3 years [1] (the core functionality is approved and building has started [2]). Can't innovate your way out of a central bank replacing your product. You're only left with uncompetitive business options to hold onto your regulatory capture as long as possible.
Plaid exists because the US hasn't mandated financial API access like Europe did with PSD2. Regulatory requirements to support this would negate the need for "innovative" startups.
EDIT: Real Talk, these networks should not be taxing economies percentage points of total payment volume [3] (again, Europe used regulation to cram down interchange fees to be more reasonable). These are legacy businesses that should be replaced with low cost utility-esq payment services such that the Fed is doing (and already exist in most first world countries [4]).
> Can't innovate your way out of a central bank replacing your product.
What about the fact that Visa and Mastercard are accepted internationally pretty much universally for transactions, whereas what you're talking about would be more likely analogous to the UK Faster Payments Service (though state backed). It's fantastic, however for buying a coffee tapping a contactless card that's also accepted in most other countries is much nicer. Perhaps with mobile wallets and being able to scan a QR to pay for stuff or using NFC could be equivalent in ease-of-use.
> these networks should not be taxing economies percentage points of total payment volume
I agree, but what value do you place on the insurance aspect of credit-card payments? There are definitely vendors I only buy from because I know I can call Citibank if they screw me.
toomuchtodo|5 years ago
Plaid exists because the US hasn't mandated financial API access like Europe did with PSD2. Regulatory requirements to support this would negate the need for "innovative" startups.
EDIT: Real Talk, these networks should not be taxing economies percentage points of total payment volume [3] (again, Europe used regulation to cram down interchange fees to be more reasonable). These are legacy businesses that should be replaced with low cost utility-esq payment services such that the Fed is doing (and already exist in most first world countries [4]).
[1] https://www.bankingdive.com/news/fed-gives-new-details-on-it...
[2] https://www.federalreserve.gov/newsevents/speech/brainard202...
[3] https://theweek.com/articles/850232/why-are-all-paying-tax-c...
[4] https://en.wikipedia.org/wiki/Instant_payment#Examples_of_in...
antihero|5 years ago
What about the fact that Visa and Mastercard are accepted internationally pretty much universally for transactions, whereas what you're talking about would be more likely analogous to the UK Faster Payments Service (though state backed). It's fantastic, however for buying a coffee tapping a contactless card that's also accepted in most other countries is much nicer. Perhaps with mobile wallets and being able to scan a QR to pay for stuff or using NFC could be equivalent in ease-of-use.
runako|5 years ago
I agree, but what value do you place on the insurance aspect of credit-card payments? There are definitely vendors I only buy from because I know I can call Citibank if they screw me.
ballenf|5 years ago
unknown|5 years ago
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