I worked a little bit for a company that worked with payment processor networks. This is my understanding (and don’t view this as a defense of them, I don’t necessarily think they’re good). There are a ton of banks. Every bank having their own POS machines would be difficult. Imagine going to one that doesn’t support your bank. So payment processors sort of provide that bridge so devices only need to know how to talk to one (or a handful) of networks and the same for the banks.
There is this (slow moving, far off) EU project that hopes to bring a new standard. It doesn’t read like they’ve got a complete solution at all, but the principles are comforting at least!
There are standards already for the format of some of the messages. These options being subpar is how we got things like PayPal originally, so who knows.
Payment processors: “I deal with the god damn customers so the engineers banks don’t have to. I have people skills; I am good at dealing with people. Can’t you understand that? What the hell is wrong with you people?”
Can someone ELI5 why these companies even exist? What service do they provide that the banks can’t handle themselves?
I worked a little bit for a company that worked with payment processor networks. This is my understanding (and don’t view this as a defense of them, I don’t necessarily think they’re good). There are a ton of banks. Every bank having their own POS machines would be difficult. Imagine going to one that doesn’t support your bank. So payment processors sort of provide that bridge so devices only need to know how to talk to one (or a handful) of networks and the same for the banks.
And so the point arises, what do these companies provide that standardization doesn’t?
The excessive fees.
There is this (slow moving, far off) EU project that hopes to bring a new standard. It doesn’t read like they’ve got a complete solution at all, but the principles are comforting at least!
https://www.ecb.europa.eu/euro/digital_euro/html/index.en.html
There are standards already for the format of some of the messages. These options being subpar is how we got things like PayPal originally, so who knows.
Payment processors: “I deal with the god damn customers so the
engineersbanks don’t have to. I have people skills; I am good at dealing with people. Can’t you understand that? What the hell is wrong with you people?”Maybe there needs to be more competition in the payment processing space.
We can’t have competition, that’s bad for business.
Because the laws are bs and intentionally make it harder while not being difficult to scale.