In The Netherlands, direct online payments using debit cards are very common. These are secure payments, verified through a bank’s mobile banking app or internet banking with 2FA.
https://en.m.wikipedia.org/wiki/IDEAL
This means there is no risk for the seller that a payment gets reversed. There is fraud, but it centers mostly on social engineering people to authorise payments for others, or to mail their debit card to “the bank” for “recycling”.
Cost per payment: about 30 cents.
Meanwhile, in other countries, credit cards are the common online payment option. Security? A number on the front of the card and a “secret” second number on the back of the card.
Cost: 1.5-3.5% of payment.
Better security is possible, but it’s hard to move from a local optimum when you’re locked into a certain ecosystem.
The credit card no-security scheme works because everyone gets reimbursed for fraud. It comes at the cost of retailers handing a few percent of every transaction to intermediaries, instead of just a few pennies.
It took us a decade and counting to get chipped cards, longer to get contactless pay, and even then we don’t really use the PIN part of chip+pin. Something like FedNow is only coming next year.
I mean every central bank could tomorrow just put up a non-permissive (#) blockchain and just make a virtual coin for every cent out there. And this would cause utter chaos. It would essentially end fractional reserve banking. That makes loans ... difficult.
The impacts are enormous, but a digital native currency is so simple, so attractive we may well try it. And then have to rethink our financial regulations. It will look a lot like ICOs.
I still think it is inevitable.
(#) ok the terminology I find either dubious or I misunderstand but basically every wallet holder gets their private / public key registered, then there is a known state of money globally, and the Bank is a verifying party to each transaction. Something like that anyway. Theee are many options but essentially if we all "trust" the money printer then the technical problems simplify.
Not only is it feasible, we've had it forever. BankOfEnglandCoin is more commonly known as the pound sterling.
I think a clean simple version is appealing - it's kind of the case for Bitcoin as a whole. Unfortunately they people attracted to that case did not realise that 75%+ of regulation and layers is trying to protect people from sharks.
It's just the political / societal implications. These are beyond "hey it's expensive for banks to cut down on fraud"
I disagree with the "banks should allow certain levels of bank fraud because X" for the simple reason we don't have "banks should provide interest free funding to murderers, sex traffickers, pornographers and drug ring" even though that is often the same thing. (And in a two page HN thread I am sure I am not the first to say that)
(#) someone else mentioned the difference between ideal and optimal which is a very good distinction.