Who is the ‘first party’ in this case? The banking system as a whole?
If it’s the whole banking system then I’m not sure how that’s solved, because as I understand in the US it’s still not easy to send money to another private individual via the banking system. And there are Venmo and cashapp and such now but they are just other third parties.
Meanwhile in the UK here it has been possible for decades to send money between bank accounts directly, and free. I still use PayPal though, because my use for it isn’t sending money to individuals, it’s being able to buy things online without creating an account and without giving my card details.
Maybe people are thinking in phone terms, and the first party is “Apple” or “Google” and the solution is Apple Pay or Google Wallet?
Thank you for providing a different point of view, I didn’t realize things were so complicated in the united states. In the EU there is a system called iDEAL which iirc is maintained by a collaboration of different banks and lets you pay for stuff online instantly and with zero fee. For sending money person-to-person, there are apps like tikkie that are just a thin wrapper around iDEAL. And in cases where these things don’t work, you can just do a direct bank transfer by typing in the other person’s IBAN in your bank’s app/website. Slightly less convenient, but still nearly instant and zero fee.
Never heard of iDEAL. Wikipedia says its a a Dutch system that was acquired by the “European payments initiative” last year. The EPI just became active as a payment system 1 month ago.
This is VERY much still in development and not at all an established system in the EU.
Not sure about the name of the systems, and I’ve seen them change names a lot over the years
But I think it’s a pretty universal thing in the EU, that you’re able to pay directly using an IBAN, I’ve even seen “direct bank tranfer” in stores that sell across the EU
In Poland we have BLIK. It’s simple, you go to your bank app and generate code, then you write that code and money is transferred. Also you can send money to phone number. That’s very great system, with no fees.
Ideal is not the same, by any means, as PayPal. Read up.
With ideal you loose your money. Ideal is made from the pov of the bank and the shop selling you stuff. Its almost impossible to claim your money back without the sellers consent.
Tikkie is not the same as PayPal since tikkie only works with EU banks. (and quite possibly at this moment only NL banks) PayPal does not need a bank account. Its also not really a wrapper around ideal but thats another discussion. And mostly a semantic one so lets not go there.
Effe wat meer moeite doen en de kleine lettertjes lezen medenedelander :)
Actually, there’s a better one for Europe. The Payment Services Directive 2 (PSD2) is an EU directive to allow payments to be done through APIs exposed by the bank. It’s essentially a wrapper for a bank transfer. Most new payments companies are just unifying these APIs.
Some counties do it better than others. The UK is very good (with the exception of starling bank). I remember Hungary being a pain.
iDEAL sounds a lot like Bancontact/Payconic in Belgium.
Which doesn’t do everything Paypal does either. Others have mentioned the buyer protection, but there’s also multiple payment methods you can link to it, subscription management, and one-click payments (where it also enters your address for shipping) - and crucially: available worldwide.
I think it’s that PayPal was one of the firsts to provide a method for collecting credit card transactions electronically.
Before PayPal, you’d often have to visit a website, then call the phone number for the seller to collect payment.
eBay needed paypal because their sellers were often not businesses, just people yardsaling stuff online.
Coincidentally, I interned at a PayPal competitor in 1998 that went under during the bust. We had an electronic interface through MS access, but it was a still a human entering in the CC number into one of those dial pads on our side and then confirming the transaction. I’m sure with all of the concerns around security nowadays that you can understand why that was a terrible long term business model.
Thanks for the context. Here in the UK I never experienced a website that didn’t take payment via credit card directly as a first option - that’s always been there default, with some sites offering PayPal as a second or third way to pay.
And about punching the numbers manually then well, sometimes a bit of Mechanical Turk works just fine lol! :)
I deal with websites today that are optimized for PayPal first with worse second and third options.
A lot of websites with third party vendors rely on PayPal since it is the cheapest account for a seller with international access and PayPal handles the fraud investigation.
Canada has Interac, Europe has another standard, the US has another standard… I wish they would all just get together and have a single way to do it that works everywhere in the world…
In Poland for online payments everyone uses Blik. It lets you generate six digit number in your banking app that you then give to the site you’re making payment to. Your banking app then asks you if you want to make the payment with information about how much you pay and to whom. You accept and you’re done, no card details were shared.
For a global solution you’d want Wise or Revolut or something. Or PayPal, but the others have features PayPal doesn’t. But there are instances where PayPal wins.
But all the different banking systems are still a mess sadly.
My hypothesis on this is they just don’t want to facilitate moving money out of their bank to another one. Moving money between accounts held by the same bank is usually much easier. The major US banks are for-profit businesses, after all.
Alternative hypothesis - US banks aren’t implementing new features because they’re mostly all still running on ancient IBM mainframes.
I’ve heard from people in banking and in health care that regulations around transferring money and health information have not at all caught up to modern technology in the US. They’re tedious and cumbersome, which means thing more more slowly and more haphazardly.
My guess is no one is willing to take on the liability. Any new system that introduces bugs or introduces attack vectors from hackers don’t want to be responsible for any lost money and I’m sure banks/insurance don’t want to take on the risk either.
Magnetic tape and clearing houses for the indefinite future!
Yea, this isn’t US focused. A person working here from the UK told me “They tell us when we go over to expect a nice modern society with a third-world banking system. Oh, and guns.”
As someone not from the US I knew of zelle but never used it, and believed it was a direct competitor to Venmo or PayPal.
The reason I thought it was its own thing was because it has its own app, and a catchy silicon-valley-startup type name, and a brand logo, and all of that.
Contrast that to the UK where the ability to send free person-to-person payments has been integrated directly into the banking system for decades, and does not have it’s own brand, or app or anything.
Zelle actually got rid of its app and is now incorporated directly in the banking apps themselves. It’s kind of like a browser extension where it has its own section in the banking app
iDEAL solved it for countries that participate. For countries that don’t, sadly there’s no good first party solution. Revolut and Transferwise are much better alternatives to paypal tho.
In my case and some others, it’s because zelle has a hair-trigger fraud detection algorithm that has frequent false positives that cause huge headaches. It could be excellent but it’s just okay. No one trusts it with substantial sums of money.
What first party solved the issue with PayPal? I literally want to see it burn but I don’t have an alternative.
I don’t understand the PayPal one either.
Who is the ‘first party’ in this case? The banking system as a whole?
If it’s the whole banking system then I’m not sure how that’s solved, because as I understand in the US it’s still not easy to send money to another private individual via the banking system. And there are Venmo and cashapp and such now but they are just other third parties.
Meanwhile in the UK here it has been possible for decades to send money between bank accounts directly, and free. I still use PayPal though, because my use for it isn’t sending money to individuals, it’s being able to buy things online without creating an account and without giving my card details.
Maybe people are thinking in phone terms, and the first party is “Apple” or “Google” and the solution is Apple Pay or Google Wallet?
Thank you for providing a different point of view, I didn’t realize things were so complicated in the united states. In the EU there is a system called iDEAL which iirc is maintained by a collaboration of different banks and lets you pay for stuff online instantly and with zero fee. For sending money person-to-person, there are apps like tikkie that are just a thin wrapper around iDEAL. And in cases where these things don’t work, you can just do a direct bank transfer by typing in the other person’s IBAN in your bank’s app/website. Slightly less convenient, but still nearly instant and zero fee.
Never heard of iDEAL. Wikipedia says its a a Dutch system that was acquired by the “European payments initiative” last year. The EPI just became active as a payment system 1 month ago.
This is VERY much still in development and not at all an established system in the EU.
Not sure about the name of the systems, and I’ve seen them change names a lot over the years
But I think it’s a pretty universal thing in the EU, that you’re able to pay directly using an IBAN, I’ve even seen “direct bank tranfer” in stores that sell across the EU
In Poland we have BLIK. It’s simple, you go to your bank app and generate code, then you write that code and money is transferred. Also you can send money to phone number. That’s very great system, with no fees.
As a german I’ve never heard about iDEAL. The Wikipedia article says that it is mainly used in the netherlands
Ideal is not the same, by any means, as PayPal. Read up.
With ideal you loose your money. Ideal is made from the pov of the bank and the shop selling you stuff. Its almost impossible to claim your money back without the sellers consent.
Tikkie is not the same as PayPal since tikkie only works with EU banks. (and quite possibly at this moment only NL banks) PayPal does not need a bank account. Its also not really a wrapper around ideal but thats another discussion. And mostly a semantic one so lets not go there.
Effe wat meer moeite doen en de kleine lettertjes lezen medenedelander :)
Actually, there’s a better one for Europe. The Payment Services Directive 2 (PSD2) is an EU directive to allow payments to be done through APIs exposed by the bank. It’s essentially a wrapper for a bank transfer. Most new payments companies are just unifying these APIs.
Some counties do it better than others. The UK is very good (with the exception of starling bank). I remember Hungary being a pain.
iDEAL sounds a lot like Bancontact/Payconic in Belgium.
Which doesn’t do everything Paypal does either. Others have mentioned the buyer protection, but there’s also multiple payment methods you can link to it, subscription management, and one-click payments (where it also enters your address for shipping) - and crucially: available worldwide.
Just another US “first world country” exceptions lol
I think it’s that PayPal was one of the firsts to provide a method for collecting credit card transactions electronically.
Before PayPal, you’d often have to visit a website, then call the phone number for the seller to collect payment.
eBay needed paypal because their sellers were often not businesses, just people yardsaling stuff online.
Coincidentally, I interned at a PayPal competitor in 1998 that went under during the bust. We had an electronic interface through MS access, but it was a still a human entering in the CC number into one of those dial pads on our side and then confirming the transaction. I’m sure with all of the concerns around security nowadays that you can understand why that was a terrible long term business model.
Thanks for the context. Here in the UK I never experienced a website that didn’t take payment via credit card directly as a first option - that’s always been there default, with some sites offering PayPal as a second or third way to pay.
And about punching the numbers manually then well, sometimes a bit of Mechanical Turk works just fine lol! :)
I deal with websites today that are optimized for PayPal first with worse second and third options.
A lot of websites with third party vendors rely on PayPal since it is the cheapest account for a seller with international access and PayPal handles the fraud investigation.
I don’t think you’re thinking of the same time frame though
Canada has Interac, Europe has another standard, the US has another standard… I wish they would all just get together and have a single way to do it that works everywhere in the world…
In the meantime: https://www.paypal.com/ca/webapps/mpp/country-worldwide
Bizarre
In Poland for online payments everyone uses Blik. It lets you generate six digit number in your banking app that you then give to the site you’re making payment to. Your banking app then asks you if you want to make the payment with information about how much you pay and to whom. You accept and you’re done, no card details were shared.
In the EU we have SEPA instant transfers
For a global solution you’d want Wise or Revolut or something. Or PayPal, but the others have features PayPal doesn’t. But there are instances where PayPal wins.
But all the different banking systems are still a mess sadly.
Given that banks’ whole thing is transferring money you’d think they’d have got that sorted from the start but no.
My hypothesis on this is they just don’t want to facilitate moving money out of their bank to another one. Moving money between accounts held by the same bank is usually much easier. The major US banks are for-profit businesses, after all.
Alternative hypothesis - US banks aren’t implementing new features because they’re mostly all still running on ancient IBM mainframes.
I’ve heard from people in banking and in health care that regulations around transferring money and health information have not at all caught up to modern technology in the US. They’re tedious and cumbersome, which means thing more more slowly and more haphazardly.
My guess is no one is willing to take on the liability. Any new system that introduces bugs or introduces attack vectors from hackers don’t want to be responsible for any lost money and I’m sure banks/insurance don’t want to take on the risk either.
Magnetic tape and clearing houses for the indefinite future!
Yea, this isn’t US focused. A person working here from the UK told me “They tell us when we go over to expect a nice modern society with a third-world banking system. Oh, and guns.”
Zelle I think.
That’s just a different third party, though.
No? Is it? Isn’t Zelle just like a directory?
Either way it’s owned by the banks. It is the first party solution.
Then I think I was wrong, and you are right.
As someone not from the US I knew of zelle but never used it, and believed it was a direct competitor to Venmo or PayPal.
The reason I thought it was its own thing was because it has its own app, and a catchy silicon-valley-startup type name, and a brand logo, and all of that.
Contrast that to the UK where the ability to send free person-to-person payments has been integrated directly into the banking system for decades, and does not have it’s own brand, or app or anything.
Zelle actually got rid of its app and is now incorporated directly in the banking apps themselves. It’s kind of like a browser extension where it has its own section in the banking app
I don’t know for sure. But I do know that Zelle is the banks’ collective response to venmo.
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Me too, me too pall.
I’m guessing they’re referring to FedNow, which is supposed to be like zelle/venmo but backed by the fed.
That being said it’s only starting to get rolled out and I have yet to see anyone else whose bank offers it.
US only, that’s why PayPal won’t stop existing
iDEAL solved it for countries that participate. For countries that don’t, sadly there’s no good first party solution. Revolut and Transferwise are much better alternatives to paypal tho.
India also has very good and robust online payment infrastructure.
It’s actually mind-boggling that USA hasn’t figures that one out, despite being saviour of capitalism.
We have Zelle, but no one uses it.
In my case and some others, it’s because zelle has a hair-trigger fraud detection algorithm that has frequent false positives that cause huge headaches. It could be excellent but it’s just okay. No one trusts it with substantial sums of money.
Like you said in your initial comment,
International money transfer (with currency exchange) But also I don’t want to give some random website my credit card