60 Minutes profiled Fintech tonight specifically payment app Venmo (which is under FTC investigation for “deceptive or unfair practices” according to a recent report CNN Money)- is this a sign of the top? Judge for yourself
60 Minutes video on Fintech
60 minutes selected excerpts on Fintech
Lesley Stahl: And you were coders?
John Collison: Yeah, we had both learned to program growing up, and, we had been building iPhone apps, we had been building web services.
But when they wanted to charge people to buy the apps they hit an unexpected snag: they had to go to the bank and file paperwork just to be able to collect the money.
Patrick Collison: Like really sort of kind of like getting a mortgage. You’d have to, like, convince them that you were worth supporting–
John Collison: And like a mortgage, it would have to be approved.
Patrick Collison: Right, exactly. And it would take sort of weeks for this approval process to happen. And it just seemed sort of like this crazy mismatch.
So they decided to do something about it. They created software that allows businesses to cut through all that bureaucracy and instantly accept payments online from countries across the globe. We visited their startup, Stripe, in the Mission District, the heart of San Francisco’s tech scene, where Patrick showed me how fast a business could set up a money-collection system using Stripe.
Patrick Collison: I think there’ll always be a need for sort of somewhere to store your money, to have it sit. And, we think, you know, for all their flaws, they have a lot of experience at being banks, right?
But fintech is targeting nearly all the other functions of banking. The startups are peeling off one profitable service after another, typically offering them for less. It’s called “unbundling the banks.”
Say you need a loan: Fintech sites match borrowers and lenders directly the way Uber connects passengers with drivers. Need financial planning? Algorithms are replacing human advisers and brokers. Apps, like Venmo, let people click money to each other similar to texting and if you want to wire money across borders:
Taavet: I’m sending $500.
The CEO of a company called TransferWise showed us how his app can send money abroad and convert currencies — say dollars into pounds — without bank tellers and high exchange rates. Users just swap with each other.
Lesley Stahl: And a coupla clicks and boom.
Taavet: Click, click, done.