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“Business” proposal

The guy at the 76 on the corner indicates that the reason their card reader is marginally functional is that it is over 10 years old. Apparently, in order to update their equipment they need a whole new computer system (they can’t just replace the malfunctioning unit) and also would face exorbitant charges for things like “setting up the encryption.” This leads me to believe that there is insufficient competition in this particular marketplace. If you disagree I have several libertarian coworkers who could explain this to you in painstaking detail.

So what I propose is the following: we (you and I) start our own credit service. We distribute the readers for a nominal fee, and guarantee to upgrade and repair them whenever necessary. The systems are easy enough to set up that they can be mailed with instructions. This is because they connect to us as a proxy, rather than any particular credit card bureau, and we run the transaction for them, approving or denying the card as necessary.

Here’s where it gets lucrative: we actually delay the transaction by a few hours or so, negotiable by contract, in order to invest the money we just got from the stranger’s credit card (in the aggregate) into a low risk-stock portfolio, possibly augmenting this technique with statistical analysis to occasionally invest in higher yield but riskier stocks. Then we sell the stock (our computer system does this automatically) and the company who ran the card gets paid within the contractual amount of time.

Because the cost of this system to clients is so much lower, less elite retailers (gas stations, municipalities) will be glad to take advantage of it. The scheme only requires some startup capital and a couple programmers who know what they’re doing.

What could possibly go wrong?

Posted in Musings.


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