Bitcoin
The Fed is getting into the Real-Time payments business
61–70 of 88 posts
Re: The Fed is getting into the Real-Time payments business
#62Earlier quoted context omitted.
If you regularly need to move 250k sums electronically inside the Australian economy, using this kind of mechanism, I'd love to know what you're doing. Only because I am nosy: I cannot conceive of transactions on this level which demand NPP class behaviour.
> If you regularly need to move 250k sums electronically inside the Australian economy. Paying sub-contractors, settling property transactions, the list goes on. When buying a house, I remember having to withdraw $60k in cash from my savings bank account and walking over and depositing it in another because it would take the other bank 3 working days to clear a bank-cheque. Some banks do offer an over-night inter-ban…
I don't think it was designed for what you want to do. Interesting problem: fast efficient payment of GST-incurring and other taxable money in a low doc manner.
Re: The Fed is getting into the Real-Time payments business
#63Earlier quoted context omitted.
Is Switzerland working on something along those lines now? I'm surprised, given the outsized Swiss position in global banking, that they're not among the leaders on this front.
Swiss banks are not leaders on anything now... They are just expensive. I pay 10 swiss francs per month to have an account and card there. And they still want 5 more so I can make more than 10 transactions a month (which I want since I started paying contactless in shops). And there aren't really any good alternatives, any bank is like that.
If I lived here and wasn't eligible for a student account as I am now, I might honestly consider just using one of the US accounts which allows for free ATM withdrawals anywhere. It seems absurd to have to pay a monthly fee just to have an account.
There do at least seem to be a few free (with no minimum balance) app-based checking/private accounts.
Re: The Fed is getting into the Real-Time payments business
#64Yes, it is always ridiculous that bank transfers are so slow in the era of fighting for every split second in the high frequency trading.
Even with frequency trading, I think the trades still settle like 3 days later.
Re: The Fed is getting into the Real-Time payments business
#65Some real-time payment infrastructures to compare to: UK - Faster Payments Service (2008) https://en.wikipedia.org/wiki/Faster_Payments_Service EU - SEPA Instant Credit (2017) https://en.wikipedia.org/wiki/Single_Euro_Payments_Area#SEPA... Australia - New Payments Platform (2018) https://en.wikipedia.org/wiki/New_Payments_Platform
Mexico - SPEI (2004) http://www.anterior.banxico.org.mx/sistemas-de-pago/servicio...
EU - TIPS (2018)
https://www.ecb.europa.eu/paym/target/tips/html/index.en.htm...
Re: The Fed is getting into the Real-Time payments business
#66Earlier quoted context omitted.
The real cost to ACH is fraud, not the electronic processing, per se. The faster a payment settles the easier and more profitable fraud becomes as it makes it easier to cash out and run. Low fees, fast transfers, high volume/high value--you only get to pick two of the three. (Okay, maybe that doesn't quite work, but you get the idea.)
I think reversibility/non-immutability is one of the sides of this iron triangle, as Bitcoin currently supports all three you listed, but is a fraud risk because while you can transfer a practically unlimited amount globally for $1 in an hour, there is no “undo”, which is, in various ways, a blessing and a curse.
Bitcoin holder and user for ~5 years here. As a comparison of two of those features, against Faster Payments (which is what the Fed is proposing creating a similar system to):
Bitcoin is slow - it takes minimum 10 mins with high fees, or in times of congestion, hours or days with low fees. Faster payments takes minimum a few seconds, maximum 2 hours, for processing, no fees involved.
Bitcoin is expensive - fees are variable depending on congestion on the network, and current value of BTC. Faster Payments charge nothing to transfer 0.01 - 100,000.00 GBP (in reality, 10k - 100k, depending on your bank. I have banks that allow 25k and 50k) in a single transaction.
Bitcoin is a wonderful experiment, wonderful proof of trustless immutable transactions, but as far as a payment system goes, is only better in one way, and worse in many others.
Re: The Fed is getting into the Real-Time payments business
#67Good amount of detail here including flow:
https://www.federalreserve.gov/newsevents/pressreleases/file...
“...In its simplest form, a completed payment through the FedNow Service involving two participating banks would have the following steps.103 To start, a sender would initiate a payment through its bank, by submitting instructions to it using an end-user interface outside the FedNow Service. After the sender’s bank authenticates the sender and validates the payment, it would submit a payment message to a Reserve Bank using the FedNow Service. The FedNow Service would authenticate the sender’s bank and validate the payment message, for example, by verifying that the message meets the FedNow format specifications. Before the Reserve Bank executes the payment message, the service would place a provisional hold on funds in the master account of the sender’s bank and would then send an inquiry message to the receiver’s bank seeking confirmation that the receiver’s bank, among other things, maintains a valid account for the receiver included in the payment message received by the Reserve Bank. If the receiver’s bank sends a positive response to the inquiry, the FedNow Service would execute the payment for the Reserve Banks by sending a payment message forward with an advice of credit to the receiver’s bank and nearly simultaneously processing a final debits and final credit to the master accounts of the sender’s bank and receiver’s bank, respectively.104 The banks are responsible for debiting and crediting their customers’ accounts and providing further notification to their customers that the payment has been completed. The entire process would take place within seconds...”
Re: The Fed is getting into the Real-Time payments business
#68Some real-time payment infrastructures to compare to: UK - Faster Payments Service (2008) https://en.wikipedia.org/wiki/Faster_Payments_Service EU - SEPA Instant Credit (2017) https://en.wikipedia.org/wiki/Single_Euro_Payments_Area#SEPA... Australia - New Payments Platform (2018) https://en.wikipedia.org/wiki/New_Payments_Platform
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Re: The Fed is getting into the Real-Time payments business
#69Earlier quoted context omitted.
Is Switzerland working on something along those lines now? I'm surprised, given the outsized Swiss position in global banking, that they're not among the leaders on this front.
Swiss banks are not leaders on anything now... They are just expensive. I pay 10 swiss francs per month to have an account and card there. And they still want 5 more so I can make more than 10 transactions a month (which I want since I started paying contactless in shops). And there aren't really any good alternatives, any bank is like that.
And I pay 0 swiss francs for an account + card (you need more than 25k of assets, else its 5...But any product such as third pillar retirement funds count!) with unlimited transactions and cash-withdrawal at any ATM. You probably have to shop around.
The reason why banks are charging now for simple accounts, is that since we have negative interest rates (the lowest in the world), its actually damn difficult for banks to make a profit now with normal accounts since the traditional business model of the difference in interest rates is now actually reversed (the target rate is negative, yet on my account I have 0%...).
Re: The Fed is getting into the Real-Time payments business
#70Some real-time payment infrastructures to compare to: UK - Faster Payments Service (2008) https://en.wikipedia.org/wiki/Faster_Payments_Service EU - SEPA Instant Credit (2017) https://en.wikipedia.org/wiki/Single_Euro_Payments_Area#SEPA... Australia - New Payments Platform (2018) https://en.wikipedia.org/wiki/New_Payments_Platform
Hopefully Canada next and no, Interac isn't an equivalent service.
Why isn't interac equivalent?