We love to hate banks and such institutions (like Paypal), and it's not hard to find reason to. How come when you're a bank you can lend out money you don't have, and charge interest on them? I'd like to do that also, please.
And we don't like to pay a healthy fee to get money transferred between countries, when it clearly happens in a split second.
But I don't think there is an alternative, and will never be so long as money is so important to humans and so long as humans tend to be selfish and dishonest (and we all have a bit of that).
Imagine you had to get ten grand and you needed somebody to courier it across the Atlantic. Who would you trust with it? A close friend. If none of your close friends are going, you need to find somebody that are trusted by everybody, somebody who does this all the time.
And if somebody is in this position, then everybody also knows he carries money, so he will be mugged, unless he gets bodyguards and security. They need to get paid, and to be trustworthy, or at least monitored. And there's no way he would take all this risk and bother without getting a nice fee for it.
Well, there you go. The only reason it seems easier to banks is because they have built up a business and trust network over decades, and that sort of thing also costs a lot of money to keep running.
7 comments:
That might have made sense in the days when there was a lot more hard cash about. When payrolls were all in cash for example. Now we're talking about electronic transfers. Rarely these days do I ever handle cash. I debit most of the time, as that is now available almost everywhere. I transfer money from one account to the next. In the old days banks had service charges for handling cheques and money because they were physically doing it. Now it is automatic. Yet they're still charging. And kind of an obscene amount considering how much they actually do and how little risk is now involved when we're not talking about physical money but a bunch of ones and zeros.
Anon said...
"And kind of an obscene amount considering how much they actually do and how little risk is now involved when we're not talking about physical money but a bunch of ones and zeros."
LOL!! Ain't that the truth! Ugh!
There IS actually a system in place for international money transfer, and it has security forces worldwide going apeshit because there is little or nothing they can do about it, yet it is routinely used to transfer sometimes VERY large sums of money across international borders, often for nefarious reasons linked to terrorism.
I read about this in some depth a while ago, and it operates within certain ethnic groups, and is based on trust ... that, and the knowledge of the consequences should you mess up. You would not be there to make a second mistake. Search for 'illegal money transfer' in Google, and it will routinely bounce up reports of convictions that can run into 9-FIGURE numbers ... 100,000,000+ !
In very simple terms, someone within the source country accepts the payment for transfer, which can often be multi-millions. A certifed 'contact' is made with a colleague in the destination country, and they are authorised to make the payment directly to a specific third party on demand, subject to a fee ... and even at this level of transfer they are dealing in either cash or occasionally gold.
Trust and consequences ... it's how much of the 'illegal' money in the world gets shuffled about, well below the radar of any authorities ... I just wish I could remember the name given to this process so I could stick it into Google again!
Banks will be necessary. And regulating banks will be equally necessary. Paypal is not a bank, and is basically not regulated at all. They get to make up their own rules, and they get to decide how to enforce those rules. That is not right.
Sorry, the above was by Bruce. I'm still getting used to my netbook.
Any transfer fees more costly than snail-mailing a check and cashing it are excessive, by principle.
Banks themselves manage just fine to physically transfer their own money whenever necessary, don't they?...
This should apply to Paypal as well. Why "innovate" with costlier solutions, if it's not solely to make an easy buck at the expense of customers? (pun intended)
Well, there's something to be said for speed and ease.
I do business with a lot of people in other countries, I often have to do bank transfers. And if it was not for my wonderful Danish bank Jyske Bank which accept a quick fax, I would be forced to go into my British bank every time and fill out a form! Often several times a week. It would be a nightmare. This has real value for me.
The same for Paypal. It is currently the *only* really easy and reliable payment system anybody can use on the net. (Except if you sell "adult" products, but OK.)
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