Fed announces details of new interbank service to support instant payments • Hacker News Board

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

#191

Post by woodruffw » Mon, Aug 10, 2020, 4:47 AM UTC

SllX wrote: post #185

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…

You say “FedNow will eventually supplement”, and I read through your post, not too thoroughly, but I liked it and saved it to my Pinboard archive. Why couldn’t FedNow eventually replace the system you described though?

It might be able to! I was being a little conservative.

It's possible that some of the more obscure abilities of ACH, like death notification entries[1], won't be needed in FedNow or will be replaced separately. But that's idle speculation on my part.

[1]: https://www.moderntreasury.com/journal/what-happens-when-you...

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

#192

Post by Jommi » Mon, Aug 10, 2020, 4:49 AM UTC

madamelic wrote: post #182

pacaro wrote: post #114

Earlier quoted context omitted.

Banking in general and international banking, predate the US London, Glasgow, Budapest and Paris all have metro systems that predate the New York Subway There are multiple bridges that are still in use that predate European colonization of North America While the oldest airport is in the US, (College Park), Hamburg, Bucharest, Bremen, Rome, Amsterdam, Paris, Sydney all follow very shortly after AFAICT Skyscrapers is…

I have always been under the impression it is because the US wasn't bombed to bits during WWII and didn't basically get to re-think infrastructure.

Maybe now that its getting bombed to bits because of COVID, something good might end up happening?

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

#193

Post by Reelin » Mon, Aug 10, 2020, 4:51 AM UTC

harikb wrote: post #130

One thing I don't see mention regarding the existing US ACH (or whatever interbank) system is that there is absolutely no verification or security in this system. Just like verification of paper check signature and a whole lot of other financial items - most banks allow anything until questioned. The easiest and cost effective way is to let it happen and reimburse for failures. 1. I have linked a non-joint account in…

> there is absolutely no verification or security in this system

Regarding 1, 2, & 4: You aren't taking the physical angle into account. In all of these cases it sounds to me like one US institution dealing with another. Wire fraud is a federal crime. All US institutions collect a fair bit of identifying information when you open an account. Good luck fraudulently transferring money into an account you control and getting away with it.

Regarding 2: They probably verified a picture of you that they had on file without you realizing it. Moreover, it's safe to assume the bank lobby was absolutely carpeted in cameras. I expect you would be unlikely to successfully commit fraud with this approach.

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

#194

Post by kmonsen » Mon, Aug 10, 2020, 4:51 AM UTC

tialaramex wrote: post #149

Gustomaximus wrote: post #117

Earlier quoted context omitted.

I dont buy this we were first to do it. Plenty of other countries do continual upgrades to subways, banking, bridges, financial systems etc. My reasons are partly these; 1) I think US tend to think of itself as No.1 nation and makes it less likely to look at other countries doing things better and looking to follow. I think this becomes a mental limitation for many US citizens and policy makers. 2) There is too much…

Your point (1) definitely. Humans are far more alike than they are different so you will be very well served by learning from the experiences of others instead of insisting on making all the mistakes for yourself, not least because some mistakes are fatal. Take US healthcare. There are a lot of models for how you can deliver universal healthcare to all your country's residents. They're all different. They all have pr…

There are a few things most outsiders don't understand about US healthcare:

- It's primary purpose it to bill people, not to cure people. It is doing really well at this.

- The secondary purpose is to provide incredible care to the richest of people. It does pretty well at this as well. Not as good as it used to, but still probably good enough.

Pretty far down the list of priorities is to heal poor people and make sure they don't fall sick again. It is not something most people give a shit about. If they die, they hey they should have been rich instead.

It is slowly changing with the middle class that was rich enough to get good care being eroded away enough to realize no-one gives a shit about them but they have enough voting power that people have to pretend (similar situations happen all over the world, just maybe not with healthcare).

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

#195

Post by Reelin » Mon, Aug 10, 2020, 4:52 AM UTC

ragona wrote: post #140

harikb wrote: post #130

One thing I don't see mention regarding the existing US ACH (or whatever interbank) system is that there is absolutely no verification or security in this system. Just like verification of paper check signature and a whole lot of other financial items - most banks allow anything until questioned. The easiest and cost effective way is to let it happen and reimburse for failures. 1. I have linked a non-joint account in…

Regarding your last sentence, I think that’s true for, well, basically the entire world. Our security sucks in general. Humans aren’t as mean as they seem, or maybe they just generally suck at it.

> Our security sucks in general.

Don't forget to account for physical enforcement.

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

#196

Post by riffraff » Mon, Aug 10, 2020, 4:56 AM UTC

madamelic wrote: post #182

pacaro wrote: post #114

Earlier quoted context omitted.

Banking in general and international banking, predate the US London, Glasgow, Budapest and Paris all have metro systems that predate the New York Subway There are multiple bridges that are still in use that predate European colonization of North America While the oldest airport is in the US, (College Park), Hamburg, Bucharest, Bremen, Rome, Amsterdam, Paris, Sydney all follow very shortly after AFAICT Skyscrapers is…

I have always been under the impression it is because the US wasn't bombed to bits during WWII and didn't basically get to re-think infrastructure.

I am not sure this is true, tho it sounds interesting.

Before WW2 there wasn't much infrastructure to begin with, the big highways have been built after.

The metro lines from before are still there and the bridges that were built before the war have just been rebuilt in the same places (i.e. were the roads arrived and the river was narrow).

Most of the big cities also still have medieval and older city centers, and we're still using roman-era routes for roads.

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

#197

Post by jdub » Mon, Aug 10, 2020, 5:00 AM UTC

xeromal wrote: post #171

jdub wrote: post #150

Earlier quoted context omitted.

You'll generally find the rest of the (first) world did 1.0 too. But they invest in public infrastructure, so also did 2.0 and 3.0. The USA is a very strange mix of hyper-first-world and second/third-world, and a lot of it has to do with how taxes are raised and spent.

The fact that it has federal and state systems probably bears a portion of the responsibility.

Spain has states with relatively similar state/federal power to the USA. The EU has nation states with more or less power depending where you look. Australia has states, Canada has provinces...

One aspect of US taxation and funding that seems wildly out of step: Primarily local funding of schools. Way to build inequality into the system!

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

#198

Post by techsupporter » Mon, Aug 10, 2020, 5:01 AM UTC

Shared404 wrote: post #145

mjevans wrote: post #31

Earlier quoted context omitted.

Alternately, every flipping service that demands you identify with a phone number (or billable credit card); which is being used as a proxy for an ID.

> demands you identify with a phone number... I recently found jmp.chat [0] which provides an easy workaround for this. [0] https://jmp.chat

The problem with jmp.chat and Google Voice and all of their kin (all of those "disposable number" or "second line" apps on the various app stores) is the numbers provided by them are SMS-capable VoIP numbers and a significant minority of businesses will flatly refuse to allow users to use that type of numbers.

T-Mobile's DIGITS service was fantastic for this, at least for doing SMS with a number not attached to the SIM you have inserted in your phone, but they blocked almost all short-code senders when the service entered production.

What I do these days is give banks and businesses a mobile number attached to the second SIM in my iPhone. That number is on a prepaid carrier under a completely different name and address than mine. There's the non-zero chance that someday I'll have to "prove" who I am to that prepaid carrier and won't be able to prove that name. The odds of that are a lot lower than the odds of having my main number snatched from my mobile carrier just by an attacker knowing the last four digits of my SSN and persuading a customer service rep to swap SIMs on the "strength" of knowing this information.

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

#199

Post by woodruffw » Mon, Aug 10, 2020, 5:05 AM UTC

hashtagmarkup wrote: post #112

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…

"Astoundingly" complicated???? ACH/NACHA isn't any more complicated than any other API. If anything it's easier than most if you're used to string processing, because the file format is just 80 character rows with 9 different types of rows starting with that numerical digit. The schema is well defined. In many cases a "transaction" is executed by simply FTPing an .ach file. What did you find so complicated?

As I mentioned in the blog post:

* ACH-formatted transactions are supposed to be 80 character rows, but ACH emitters play loose and fast with that. 81 (CR/LF) and 82 (CR+LF) character entries are common enough in the wild that financial communities regularly complain about them. ACH transactions are supposed to be concatenative, so it wouldn't surprise me to learn that most real-world ACH handling code needs to handle 80, 81, and 82-character records in the same stream.

* The envelope and hierarchy of ACH is extremely simple. The internal state machine isn't: there are plenty of overlapping entry classes[1], obscure return codes, common misuse of said codes, and rider entries (like addenda information). The records for international settlements are shockingly complex; no ODFIs or RDFIs seem to follow the rules about not clawing back money after various contest periods expire.

[1]: When do I use CIE entries versus PPD? Do I use WEB for a recurring utility payment that was initiated online?

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

#200

Post by osdiab » Mon, Aug 10, 2020, 5:06 AM UTC

haltingproblem wrote: post #155

gexla wrote: post #82

Earlier quoted context omitted.

Could also be a forced thing due to being relatively fragmented with many different countries under a union which isn't as tight as the US union of states. Great thing about the US is that it's possibly the biggest homogeneous market in the world where you can form a lot of reliable expectations of people throughout. By contrast, countries such as China and India are highly diverse culturally. You can't even expect p…

China is diverse linguistically? You mean to say I can encounter some one in a major metro in China and they won't speak mainland Mandarin?

While the Chinese government has forced the majority of young people to learn Mandarin in schools, even just taking a 1 hour train ride from Shanghai to Hangzhou, both cities have local languages that are mutually unintelligible. Elderly people, especially in the countryside but also in the cities occasionally, often don't know how to speak Mandarin at all. But if you mostly hang out with urban youth you should be fine entirely with Mandarin.