Value of an old IBM PS2 CL57 SX Laptop 3328

somewhat related blog https:--www.financialcryptography.com-mt-archives-000711.html

to some extent paypal was providing online accounts where they then turned around and do a real payment operation thru the real payment infrastructure ... and charging a premium over and above what they had to pay for doing the real payment transaction.

part of this was financial insbreastutions doing real payments are fairly heavily regulated and have lots of reporting and operational requierments. having a separate operation for online stuff, may be able to operate with much less overhead and restrictions. however, they are vulnerable to real financial insbreastutions moving into the market space and eliminating the middle man (and the buttociated extra intermediary overhead charges) ... aka offer the same function directly for approx. the same amount they are currently charging the middle man.

you see part of this characteristic in some manufactoring operations that offer consumer goods and also provide financing for the purchases. in several cases, the financial arm is making nearly all of the profit and the actual manufactoring is operating close to a break-even or even in the red. however, the two different organizations are frequently kept at arms length in order to avoid subjecting the manufactoring to the regulations and reporting overhead that the financial organization is subject to (there have been jokes that financial services are the only thing keeping some amount of the rust belt afloat).

there were also some number of digital cash operations floated in the 90s (attempting to address portions of the online payments market segment) ... however, doing detailed business process analysis turned up that some number of them were just excuses for acquring the float.

some digital payment infrastructure was set up where the consumer had to transfer money into the online payment infrastructure ("stored-value" and various other kinds of similar mechanisms). the money in this infrastructure wasn't earning the consumers any interest ... it was all going to the sponsoring infrastructure (several stored-values, gift cards, etc, work that way).

Several central banks took a look at many of these operations and eventually made a statement that they would allow the insbreastutions to retain the float during the inception period (long enough until the insbreastutions had covered the cost of the initial deployment and other startup costs). However, after a couple of years, these insbreastutions would be expected to start paying the consumer interest for the money on deposit in these accounts.

The ruling that there would no longer be the financial bonanza (from the float on the money in these accounts) significantly reduced the interest in developing and deploying these types of operations.

a couple past posts mentiong the float incentive behind many of the digital cash operations:

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