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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

#331

Post by Misker »

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…

Hey bud, never thought I'd see an old friend on the top of an HN thread.

That was a great writeup to read while lying in bed dreading the week!

Best, Misker

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

#332

Post by zo1 »

apta wrote: post #204
rafaelturk wrote: post #126

Earlier quoted context omitted.

I'm also working with Brazilian instant payments schema, aka PIX. We've simply created a mapping layer to convert all ISO messaging to json. Internally all our logic runs on json. It works because at the end of the day, payments only need a few fields to work: Source, Destination, Amount.

Quite scary to run financial transactions using an untyped format.

Everything is JSON these days, unfortunately.

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

#333

Post by zo1 »

cymon wrote: post #309

This is quite a shame on the US part to be so much behind the times: Kenya has had a Real-Time Gross Settlement (RTGS) system for years supported by the central bank which works in near-realtime during working hours, and an even better one was recently introduced by a conglomeration of the local banks which works in real-time 24/7 called Pesalink: https://www.ipsl.co.ke/pesalink ..

Agreed. What's an even bigger shame is that places like the US and UK don't have proper centralized and verified citizen databases and national identification documents linked to it.

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

#334

Post by ZeroCool2u »

lelc wrote: post #84

If anyone from the FED is reading this I have this advice: don't use ISO20022! (I've been working on the brazilian instant payments project, known as PIX). It's an overly-complicated-try-to-solve-everything standard that promises interoperability but only delivers pain and misery. Since each country has its own standards for person and account identification, in dealing with these local realities, the ISO20022 adds q…

I actually do work at the New York Fed and saw this announcement recently myself. I was wondering about that standard and started looking at the website, but it seemed a bit light on information, which made me suspicious. At least I know my instincts may have been on the right track.

Unfortunately, I'm much too far removed to influence anything. The Federal Reserve System is massive and distributed into many large silos (Reserve Banks & The Board of Governor's) that prevent power from being too centralized in a single bank, but also make it difficult to work with anyone that's not in your bank. Interestingly, this is by design! Anyways, this work is primarily driven by the Board of Governor's and I'm at FRBNY, so I'll probably be getting most of my information from press releases like this one.

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

#335

Post by aiethicsthread »

alasdair_ wrote: post #154
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 #3, having a bank agent state on a recorded call “well, you don’t sound female” seems like a good way to get sued by a protected class.

Which? Trans people aren't a protected class in the US.

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

#336

Post by zie »

champtar wrote: post #208
zie wrote: post #152

Earlier quoted context omitted.

Yes, for the bank I deal with, we GPG encrypt and sign the ACH transfer file, and then we send across scp/sftp where both sides have known public keys. Both are rotated regularly. I imagine many banks operate similarly, but I can't say that for certain.

I'm curious if the GPG signature is properly checked. There is no easy way to validate a GPG signature (ie fail if the file is not signed by X), you have to use a verbose machine mode and look for a specific string. GPG will happily decrypt a non signed file also, so there are many ways to misuse GPG, and many of them are SO top answers ;)

Well I know my side is checked :) I've never tried to send a not properly signed file, however. GPG is indeed a mess, but it's not like there are awesome alternatives, really.

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

#337

Post by logicuce »

throwaway9d0291 wrote: post #256
koopuluri wrote: post #216

I moved to India at the start of the year and there's the Universal Payment Interface (UPI) here that essentially allows a Venmo like interface to transfer $ instantaneously from any bank account to another - by simply using the recipient's phone number or a QR code. There are multiple apps that interface with UPI, and the barrier to entry isn't high - allowing for good competition on the UX. Literally every person I…

> I felt like I stepped into the future. It's more like stepping out of the past. It's not that India is particularly ahead, it's that the US is particularly behind. The EU for example has essentially instant SEPA transfers now and has done for a while.

I don't know how much you know about payments in India, but they are, from what I have heard, fairly evolved and advance.

In fact, in India there are 4 different ways in which you can do online transfers across the banks (NEFT, RTGS, IMPS, and UPI). The latest iteration, UPI, is indeed state-of-art. It lets even companies like Amazon, Google, and PhonePe, which are not traditionally banks, to offer ability for people to do transfers from their Bank account. QR Code for UPI apps are very commonplace at least in metros and it enables nano transactions without really a fee to small merchants and users. There are lot of fail safe mechanisms and safety features built into the protocol and a user is not really hostage to the bank or the payment app as you can switch both at your will.

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

#338

Post by bildung »

crazygringo wrote: post #101
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.

As a general rule, the US is terrible at a lot of first-world things for a good reason: because it was the first (or close). We have crappy old subways, airports, bridges, skyscrapers, and so on... because we built them early, versions 1.0. And they stuck around. Other countries had the luxuries of building their versions decades later, when the technology was 2.0 and 3.0 and so on. So the US is stuck with both old a…

> As a general rule, the US is terrible at a lot of first-world things for a good reason: because it was the first (or close).

Is that really true?

ATMs were first in Europe and Japan, BACS in the UK is older than ACH in the US.

I think this is more about lack of coordination (i.e. political reasons) than something like a natural first mover disadvantage.

German debit cards for example simply had both stripes and chip for the transition period.

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

#339

Post by ragona »

Reelin wrote: post #195
ragona wrote: post #140

Earlier quoted context omitted.

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.

Oh I don’t. All digital security problems are eventually physical security problems.

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

#340

Post by ragona »

illektr1k wrote: post #165
ragona wrote: post #140

Earlier quoted context omitted.

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.

You guys might enjoy https://en.wikipedia.org/wiki/Truth-default_theory

Oh that’s neat, I did enjoy it. Thanks. It makes sense to me. Lying is work. Humans usually take the easiest path. Sometimes lying is less work than actual work and then humans lie.
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