This charging for access thing is a bad thing for sure. But fuck fintech. They are not payment innovators, they are just a new class of middlemen looking to leach off of society. Sometimes they...
This charging for access thing is a bad thing for sure. But fuck fintech. They are not payment innovators, they are just a new class of middlemen looking to leach off of society. Sometimes they happen to be taking that stream of cash from someone else, but they’re leaches nonetheless. Plaid in particular is not a company I would describe as trustworthy precisely because they operated a business model that relied on convincing people to break their bank contracts by providing their bank passwords, thus giving them control over a ton of private information. So while I chide Chase for their obviously anticompetitive behavior, I don’t really have any sympathy for companies like Stripe.
The solution for all of this is a hell of a lot more legislation and perhaps having the government operate a payments system that operates with the expectation of this century, but that is basically an impossible dream at this point. Even without the dick in the Oval Office, the people with all the money don’t want that to happen because they are the biggest leaches of them all and they have all the power for it.
I agree wholeheartedly with everything you're saying. With that out of the way, a leech is a blood sucking parasite. Leaching is extracting something from another material through dissolving it in...
I agree wholeheartedly with everything you're saying. With that out of the way, a leech is a blood sucking parasite. Leaching is extracting something from another material through dissolving it in a liquid. Similar concepts and similar words, but the one you used wasn't much of an insult.
In this post, Patrick McKenzie explains how the banks are trying to charge high prices for access to their API's by fintech firms: ... ... ... (I still do that, because I don't want to give anyone...
In this post, Patrick McKenzie explains how the banks are trying to charge high prices for access to their API's by fintech firms:
The data banks find it annoying to make Open are, principally, account numbers. This is because, due to the long shadow of checks, possession of an account number (plus the routing number, identifying the bank) is sufficient to attempt to debit a bank account. Direct account-to-account transfers, including “pulls”, are a common payment method in many countries, but they are not a large share of consumer to business payments in the United States.
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Several fintech companies, including Stripe, realized that they could use Open Banking to make account-to-account payments something customers would actually enjoy. The user is prompted at checkout whether they’d like to pay directly from their bank account. They log into their bank account and grants the fintech read access. This is a much stronger signal of authorization than simply knowing an account number.
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Prior to the existence of Open Banking, the aggregators [...] were largely forced to build supportability networks, bank by bank, by writing so-called screenscraping software. Screenscraping software emulates someone typing the password into a bank’s website then browses through a live bank account to extract the information needed from it. Hopefully that screenscraping software isn’t bugged, because bugs in scrapers that interface with consequential systems are terrifying.
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Older users might remember that this used to require asking the brokerage to make trial transactions, typically pushing two ACH payments under $1 in total and asking you to confirm the amounts. This would demonstrate that you hadn’t typoed your bank account number, that the account could actually accept transfers, and that you (presumptively) had authorized access to that account, given that you could read recent transactions at will.
(I still do that, because I don't want to give anyone my bank account password.)
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So why is Open Banking in the news now? We’ve had Open Banking for almost 15 years.
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[In July,] Chase demanded payment for access to Open Banking APIs, and would cut that access if companies interfacing with them did not acquiesce. The fees demanded were enormous.
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Plaid was asked for $300 million, which would be 75% of their 2024 revenue. That is likely more than the wages and benefits for all of the 1,200 people who work at Plaid.
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We should not allow banks to get into the habit of sending demand letters to ruin the economics of businesses they simply do not like. Those demand letters will be inevitably abused, including in ways which are not determined by any conceivable direct business interest.
Older users might remember that this used to require asking the brokerage to make trial transactions, typically pushing two ACH payments under $1 in total and asking you to confirm the amounts. This would demonstrate that you hadn’t typoed your bank account number, that the account could actually accept transfers, and that you (presumptively) had authorized access to that account, given that you could read recent transactions at will.
This charging for access thing is a bad thing for sure. But fuck fintech. They are not payment innovators, they are just a new class of middlemen looking to leach off of society. Sometimes they happen to be taking that stream of cash from someone else, but they’re leaches nonetheless. Plaid in particular is not a company I would describe as trustworthy precisely because they operated a business model that relied on convincing people to break their bank contracts by providing their bank passwords, thus giving them control over a ton of private information. So while I chide Chase for their obviously anticompetitive behavior, I don’t really have any sympathy for companies like Stripe.
The solution for all of this is a hell of a lot more legislation and perhaps having the government operate a payments system that operates with the expectation of this century, but that is basically an impossible dream at this point. Even without the dick in the Oval Office, the people with all the money don’t want that to happen because they are the biggest leaches of them all and they have all the power for it.
I agree wholeheartedly with everything you're saying. With that out of the way, a leech is a blood sucking parasite. Leaching is extracting something from another material through dissolving it in a liquid. Similar concepts and similar words, but the one you used wasn't much of an insult.
In this post, Patrick McKenzie explains how the banks are trying to charge high prices for access to their API's by fintech firms:
...
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(I still do that, because I don't want to give anyone my bank account password.)
...
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Older users? I had to do that in 2024.