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Fed announces details of new interbank service to support instant payments

federalreserve.gov

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Re: Fed announces details of new interbank service to support instant payments

#51

Post by amiga_500 »

XMPPwocky wrote: post #26
amiga_500 wrote: post #20

Earlier quoted context omitted.

I just cannot understand how you guys accept bad cops, bad healthcare, bad employment rights, bad social mobility, bad education and bad banks, but apparently national id is where you draw the line. Why didn't you draw the line before all this other stuff that is far behind much of Europe? ------ can't reply directly to the GDP comment as some cry baby has flagged my post and then a free speech loving mod has shadow-…

Well, are we supposed to not resist this bad thing because there are other, worse things? That seems less than helpful.

I'm expecting you guys to give up on this, just like all the other stuff. Downvote away, but you've lost so many rights since the 1960s, with barely a peep.

Re: Fed announces details of new interbank service to support instant payments

#52

Post by TedDoesntTalk »

tyingq wrote: post #37
TedDoesntTalk wrote: post #33

Planet Money did a piece on ACH seven years ago. It’s a batch system written in COBOL in the 1970s: https://www.npr.org/transcripts/229224964 And that’s why the Feds want to replace it, not refactor it.

Your Visa transactions are running through older TPF 360 assembler. Old isn't an excuse for bad.

It’s not bad. It is simply a product of its time: according to planet money in that 2013 piece, ACH batch processing runs only once per day and only during bank hours (no weekends, etc).

Presumably, increasing that frequency would break something in the system or it would already have been done.

In the ‘70s, no one predicted 24/7 banking or even ATMs let alone internet payments. I remember my father using an ATM for the first time in 1981, I think. Perhaps it was 1980. But we had to drive 7 miles to get to it.

Stocks were still traded in fractions, not decimals!

Re: Fed announces details of new interbank service to support instant payments

#53

Post by CyberDildonics »

tyingq wrote: post #37
TedDoesntTalk wrote: post #33

Planet Money did a piece on ACH seven years ago. It’s a batch system written in COBOL in the 1970s: https://www.npr.org/transcripts/229224964 And that’s why the Feds want to replace it, not refactor it.

Your Visa transactions are running through older TPF 360 assembler. Old isn't an excuse for bad.

That wasn't an excuse. It was an explanation and context for why it is bad and why it was acceptable when created.

Re: Fed announces details of new interbank service to support instant payments

#54

Post by zymhan »

jimbob45 wrote: post #40
vxNsr wrote: post #17

Earlier quoted context omitted.

Real ID is very worrying and I’m hopeful that it eventually goes away as it keeps getting delayed.

I don’t understand the criticism behind RealIDs and the criticism section on Wikipedia wasn’t helpful. Are passports not basically national IDs? Does it just boil down to blocking illegal immigrants from accessing some services?

Passports are not required to access (pretty much) any Public Service in the US. Passports, Drivers Licenses are optional, as are State IDs.

If you _want_ a Federal ID that is accepted by all states, you can certainly get a passport. It's what I often use for ID.

Re: Fed announces details of new interbank service to support instant payments

#55

Post by api »

kome wrote: post #32
pfundstein wrote: post #24

Nearly all first world countries enjoy instant payments at the point of sale and person to person. It boggles my mind that it has taken this long and a pandemic to even set the gears in motion, all while battling ridiculous levels of cheque and credit card fraud.

Americans have such a strange relationship with technology... the most innovative startups, and yet the worse infrastructure. here in Europe it's the contrary :) and btw: the service will be active in 2023 or 2024... while I enjoy immediate transfers bank to bank since years...

Its because a generation or two of Americans were propagandized heavily that anything socialized will immediately lead to Soviet communism. If we build infrastructure Lenin will rise from the dead and transform into a giant mech warrior and wade across the Atlantic to destroy us all.

Re: Fed announces details of new interbank service to support instant payments

#56

Post by qzx_pierri »

kome wrote: post #32
pfundstein wrote: post #24

Nearly all first world countries enjoy instant payments at the point of sale and person to person. It boggles my mind that it has taken this long and a pandemic to even set the gears in motion, all while battling ridiculous levels of cheque and credit card fraud.

Americans have such a strange relationship with technology... the most innovative startups, and yet the worse infrastructure. here in Europe it's the contrary :) and btw: the service will be active in 2023 or 2024... while I enjoy immediate transfers bank to bank since years...

Germany?

Re: Fed announces details of new interbank service to support instant payments

#57

Post by throw0101a »

ahmedfromtunis wrote: post #19

How come the US -- the biggest economy in the world, and home of the most sophisticated banking sector on the planet -- is still not equipped with such a system? Are banks resisting it and if yes, why would they?

> is still not equipped with such a system?

Inertia, at least partially.

It's why chip-and-pin is still not a thing in many places: Old School credit card POS devices were distributed to a lot of places over the years, and those only had the magnetic strip readers. Replacing is time consuming and no one wants to go through the expense and effort of changing it in all the places that they're in (e.g., gas pumps).

Sometimes it's handy to be a late/delayed adopter of technology and to skip a generation or two.

Re: Fed announces details of new interbank service to support instant payments

#58

Post by zymhan »

jperras wrote: post #21

Canadian here. This sounds like Interac eTransfer, which is available to any person sending/receiving money where the endpoints are Canadian banking institutions (all of them, I guess?). We've had this since 2003.

This has been such an ongoing issue in the US that a massive industry has sprung up to fill the void for "instant transfers". Paypal, Venmo, Apple/Google Pay, Square Cash, etc are all because the US financial transfer system is hopelessly outdated.

Re: Fed announces details of new interbank service to support instant payments

#59

Post by JMTQp8lwXL »

woodruffw wrote: post #39

Settlement between banks in the United States is astoundingly complicated, for (fascinating, terrifying) historical reasons. FedNow is a huge step towards fixing holes that private companies have been papering over for over two decades. Blatant self promotion: for anybody interested in learning more about the Automated Clearing House system (which FedNow will eventually supplement) and interbank settlement in general…

The history of credit cards is also somewhat wild: unsolicited cards arrived activated in the mail, and consequently, a huge volume of credit card fraud was born. Consumer protections came a few years later cleaning up obvious issues. But looking at that story, it seemed awfully reminiscent of the Uber model.

Re: Fed announces details of new interbank service to support instant payments

#60

Post by kelnos »

TedDoesntTalk wrote: post #41
beaunative wrote: post #11

Earlier quoted context omitted.

ACH could still be expedited even with the need to verifying identity. Technically it only need to demonstrate that the identity of receiver and the identity of the referred bank account are consistent, a national id won't be necessary. Fed is not technically a branch of the government.

It’s got nothing to do with that. ACH is a batch processing system written in COBOL in the 1970s. Nothing is going to get rid of the batch nature of the system except a new system based on asynchronous messaging. That’s what FedNow is.

The issue with ACH isn't the batch nature, it's that banks on both sides of the transaction are allowed a fairly long amount of time (upwards of a business day) to decide whether to accept or decline the transaction.

If they decide immediately, it can go faster, but they don't have to, and many banks have no incentive to work on processing faster.

They could still use a batch processing system, and just process the batches once per hour, or half hour, or whatever. It would still be slower than some newly-designed instant payments system, but could potentially be more palatable within the current system.

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