Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Fed announces details of new interbank service to support instant payments

federalreserve.gov

Post reply on HN
Print view View original

61–70 of 431 posts

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

#61

Post by greggyb »

throw0101a wrote: post #44
vxNsr wrote: post #9

> The rapid expenditure of COVID emergency relief payments highlighted the critical importance of having a resilient instant payments infrastructure with nationwide reach, especially for households and small businesses with cash flow constraints," The main issue with releasing cash as I understand it wasn’t that it wasn’t arriving fast enough; rather it was verifying the recipient was eligible and was who they say th…

> […] a national ID which I am more against the more I hear about […] The US already has a de facto one AFAICT: the Social Security Number (SSN). Unique to every individual, assigned from birth (or whenever applied for), and which never changes for the life of the person until they die. > Many countries issued such numbers for a singular purpose, but over time, they become a de facto national identification number. F…

Unfortunately....

> Unique to every individual

https://www.pcworld.com/article/3004654/a-tale-of-two-women-...

> assigned from birth (or whenever applied for)

Sort of. Mostly yes, but not for everyone. As social security and medicare are de facto insurance policies, there are populations in the U.S. which object to them, and are not required to register, and therefore do not have SSNs. The Amish are one group.

https://en.wikipedia.org/wiki/Social_Security_number#Non-uni...

> and which never changes for the life of the person until they die.

https://en.wikipedia.org/wiki/Social_Security_number#Replace... Note that one valid, accepted reason for issuing a replacement is when a duplicate has been issues.

And finally, as anyone who has ever worked in records management for a large institution that happens to receive SSN information, an SSN very explicitly is not a candidate primary key for an identifier of an individual. Everyone I've met who has tried has horror stories to tell. SSNs are not primary keys for individuals in the U.S.

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

#62

Post by throw0101a »

JumpCrisscross wrote: post #28
TheSoftwareGuy wrote: post #25

Earlier quoted context omitted.

The fed is absolutely an agency of the us government: https://www.federalreserve.gov/faqs/about_14986.htm >The Federal Reserve System is not "owned" by anyone. The Federal Reserve was created in 1913 by the Federal Reserve Act to serve as the nation's central bank. The Board of Governors in Washington, D.C., is an agency of the federal government and reports to and is directly accountable to the Congress.

> fed is absolutely an agency of the us government It’s absolutely not a government agency but also absolutely not privately owned. It’s best thought of as a non-governmental entity that is strongly influenced—and sanctioned—by the government, but does not operate underneath it. This is why e.g. the Fed and Treasury negotiated how losses fell from the Main Street lending program. And if you visit a Fed, one of the fi…

> It’s absolutely not a government agency but also absolutely not privately owned.

The closest analogy is that it's a co-op:

> Some observers mistakenly consider the Federal Reserve to be a private entity because the Reserve Banks are organized similarly to private corporations. For instance, each of the 12 Reserve Banks operates within its own particular geographic area, or District, of the United States, and each is separately incorporated and has its own board of directors. Commercial banks that are members of the Federal Reserve System hold stock in their District's Reserve Bank. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. In fact, the Reserve Banks are required by law to transfer net earnings to the U.S. Treasury, after providing for all necessary expenses of the Reserve Banks, legally required dividend payments, and maintaining a limited balance in a surplus fund.

* https://www.federalreserve.gov/faqs/about_14986.htm

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

#63

Post by kelnos »

Krasnol wrote: post #12
vxNsr wrote: post #9

> The rapid expenditure of COVID emergency relief payments highlighted the critical importance of having a resilient instant payments infrastructure with nationwide reach, especially for households and small businesses with cash flow constraints," The main issue with releasing cash as I understand it wasn’t that it wasn’t arriving fast enough; rather it was verifying the recipient was eligible and was who they say th…

How is a national ID still a thread with all the data on voters which is already out there? You could have verified voters accounted this way too which would probably raise the amount of voters. You could even establish mail voting properly sending the documents to everybody who's eligible without a need to register. I don't understand that fear of a national ID in the US. It works in other countries and you have stu…

The GOP doesn't want more people voting; they hang onto power mainly through gerrymandering and various voter suppression measures.

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

#64

Post by [deleted] »

zymhan wrote: post #58
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.

[deleted]

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

#65

Post by greggyb »

gizmo686 wrote: post #14
vxNsr wrote: post #9

> The rapid expenditure of COVID emergency relief payments highlighted the critical importance of having a resilient instant payments infrastructure with nationwide reach, especially for households and small businesses with cash flow constraints," The main issue with releasing cash as I understand it wasn’t that it wasn’t arriving fast enough; rather it was verifying the recipient was eligible and was who they say th…

We already have a national ID. It is called social security, and it is bad at its job because it was explicitly not supposed to be a national ID when it was created.

I responded in more depth to a sibling[0]. SSNs are not valid for use in uniquely identifying individuals. If you try to use an SSN as a primary key for U.S. individuals you are in for a world of pain.

[0] https://news.ycombinator.com/item?id=24104158

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

#67

Post by kelnos »

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...

Two things (probably more) contribute to this, I think:

1) Americans have been trained from birth to distrust government in all forms. Centralizing more and more services triggers a visceral fear response. (IMO it's nonsense, for the most part, but it's there nonetheless.)

2) Being "first to market" with new technologies often means you're just stuck with the sub-optimal first version, while other countries can learn from your mistakes when they do their first implementation.

On the flip side, when I'm in Europe, I definitely run into more places that only take cash, which I find annoying to no end. It's rare for places in the US (at least in fairly well-populated areas) to not take credit or at least debit cards.

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

#68

Post by TedDoesntTalk »

kelnos wrote: post #60
TedDoesntTalk wrote: post #41

Earlier quoted context omitted.

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 b…

> no incentive to work on processing faster

Not sure I agree. How about the incentive to prevent customers using competing services like Venmo and others?

Also the incentive to quickly receive funds into bank coffers so the bank can lend it faster.

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

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

#69

Post by dawnerd »

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.

US has means of instant payments, it's just not standard across banks. There's lots of way other countries are far behind as well (like Canada having banks that still charge for every transaction you make).

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

#70

Post by lyrrad »

TedDoesntTalk wrote: post #52
tyingq wrote: post #37

Earlier quoted context omitted.

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…

Things have improved somewhat since then, with the introduction of Same Day ACH, which provides two additional ACH processing periods each business day.

https://www.nacha.org/rules/same-day-ach-moving-payments-fas...

It's more expensive than regular ACH transactions. The above page seems to indicate the sending bank has to pay the receiving bank 5.2 cents per same day transaction on top of regular ACH fees (that appear to be 0.0185 cents per transaction sent or received for 2020).

Post reply on HN