Farhad Manjoo on the new Square Stand:
Translation: Credit cards will be here for a good long time. This isn’t a novel admission; Dorsey has always said that he doesn’t think plastic will go away anytime soon. But the launch of the Square Stand—a device engineered to improve the credit card experience—shows how deeply Square is betting on credit cards. It’s as if, after building the Model T, Henry Ford also spent a lot of money to build a faster horse, just to hedge his bets. In this way, Square Stand prompts a deeper question: What if, as wonderful as Square Wallet is, we just never move beyond credit cards? What if people find faster horses good enough?
The problem with credit cards is not that they’re not useful. It’s that they break down very easily and are a huge hassle to replace. If you have to get a replacement card, it’s a real pain, especially if you have a number of subscriptions attached to that account. That’s a big part of the reason that, even though I have bruised and faded cards, I live with it. Because replacing it is a bigger hassle.
But there is something to be said about Square’s overall philosophy here. Last weekend I went to a farmer’s market, something that’s long been a cash-only affair at many venues. But there were a number of vendors sporting Square devices—something which goes a huge way towards liberating both consumers, who hate carrying tons of cash, and vendors, who often find themselves on the short end of the stick with payment systems. The result? I only had to pull out cash once. They’ve gone a very long way towards making payments not suck. And that’s pretty awesome.
(Oh, and the other thing? The way they turn receipts into a digital thing is awesome in the age of receipt hell. The last time I went to CVS, I got six coupons. Six. How many trees does CVS waste because they give coupons to people that they’d never actually use? It’s not eco-friendly and it’s consumer-hostile. But if I had them on my phone, I might remember I have ‘em.)
On Friday, Bank of America bent. A source at the bank, who asked not to be identified because the policy is still evolving, said it likely it will offer ways for its customers to avoid debit card fees through using direct deposit, maintaining minimum balances or using Bank of America credit cards.
They sure Netflixed that up.
It may be too early now to talk about the Law of Unintended Consequences, but years from now, we may owe a debt to reforms like Dodd-Frank for finally weaning us off the physical wallet and encouraging us to experiment with the new technologies helping to create the Digital Wallet.The Washington Post’s Dominic Basulto • Arguing that Dodd-Frank’s side effects — such as Bank of America’s decision to start charging people for the right to use a debit card — will be great in the long run, because it will push consumers and businesses to stop relying on banks for these sorts of services, instead going for phone-based options, provided by companies such as Google or Square, instead. Basuito compares Bank of America’s controversial move to Netflix’s price-raising scheme, and suggests it will hurt them long-term. source (via • follow)
WSJ:
NEW YORK—Bank of America Corp., the largest U.S. bank by assets, plans to charge customers a $5 monthly fee for making debit-card purchases starting early next year, according to an internal memo sent to bank executives Thursday. [more]
I’m speechless.
Seem to remember rumblings of a similar fee elsewhere. No matter. This is a bad idea for many reasons.
» A fight that directly affects small businesses: We’ve been to many small businesses in our day that have gone out of their way to avoid using debit cards, specifically for this reason. We’re with them in this case; really high charges for every purchase, even tiny ones, is straight up greedy. Fortunately, a key senator, Dick Durbin, agrees with us: ”Honestly, are we going to stand here and say we can’t protect small businesses across America struggling to survive?” The fight for keeping the fees has bipartisan support; the main guys backing banks in the Senate are Bob Corker (R-TN) and Jon Tester (D-MT). They claim that banks will have to replace the interchange charges with higher fees on consumers. Maybe they should; the benefit to small business as an economic driver makes it worth it.
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