If you want to steal money, don't rob a bank. Open one.
Heard that on a radio today by a listener. What an eye-opening thought.
We take it as granted but the banks and financial institutions are made in such way that no single transaction goes through without them profiting. They will always take care of their share first, before anything else. The bank always profits no matter what you do.
In best case scenario you will have your business dealt with, and in worst case you will get "We are sorry sir, but we can't do that" - and the fee still deducted.
Online payment works the same way. Take a look at Paypal. They will take a nice hefty share of all transactions, and put you through embarrassing and long-lasting procedures in case of any problems and disputes. They can do it because they do not have competition.
But what if they did. Is it not possible to create a free (or an almost free) online banking system?
Let's call it open source banking.
If I want to transfer money I don't want to pay 3% or 5%. Why not take only 0.01%? That should pay all bills and a small island for all open source lovers.
Possible?
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Posted in: Debate
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9 Comments
Just an update, as Hyder said, Paypal is not bank and having no other source of income except the payment processing fees. Paypal is just an aggregator who deducts money from payer and deposit it to payer. The major portion of payment processing goes to bank which is as good as 1%-2.5% and that's even if you have this open source banking (which is a scary idea in itself) the payment processing charges wont go beyond bank processing charges.
Sorry for typo
*deducts money from payer and deposit it to payee.*
well my friend, thats not quite right what you are saying, no offence :
"In 2007, PayPal Europe was granted a European Union banking license, and is regulated as a bank by the Commission de Surveillance du Secteur Financier (CSSF)."
here is a script and knock yourself out ;)
http://project.cyclos.org/
Love where you going with this. Love your work!
it's a danger world,yesterday i didn't look to my money,and second day ,may be i would shout:wheres my money,where?
i bought fund from bank in CHINA,and i have shouted!!!!
wheres my money,,,,,,
terrible
Just found this to add to the discussion: http://www.globalideasbank.org/site/bank/idea.php?ideaId=5204
Abang: I am aware that interests are the primary source of income, and I do not have anything against that. I just cringe at the idea of taking several percents provision fee for providing a service such is money transfer.
Hyder: Well the question of holding someone responsible is just dug deeply into how open source works. Who is taken responsible if your Linux (open source) does not work properly? No one. It's the risk you take. But that does not prevent it becoming second most popular operating system. Or a new open source browser - Google Chrome. Or way wikipedia works is still beyond imagination of many people.
Actually, the banks are making money not only by imposing that controversial fees. There are other channel as well and they group them into non-fee-based income and fee-based income. Most of the profit is contributed by the interest they charged to their borrowers. Another major income is from overnight interest they earn for placing their funds at the Central Bank, World Bank and other financial institutions providing repo placement or forex trading services.
The idea is good... but who manages the transactions?... i wouldn't want my transactions open-sourced! That'd be really scary! And who would you hold responsible if a customer information is compromised?
Also, there's another big issue with online-only banking... without a dedicated brick and mortor branch, verifying one's identity comes with obstacles of its own. I can send in a copy of my documents but how does the management know it's not photoshoped?!
In the case of paypal, it's not really banking, just a transaction medium between existing bank accounts. I'll ask around to see if an open-source solution is possible... like I said, the idea is good!