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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

#381

Post by personlurking »

lopis wrote: post #298
throwaway9d0291 wrote: post #256

Earlier quoted context omitted.

> 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.

It's counter-intuitive, but if you think about it, less develop countries are in a better position to deploy fully integrated systems. E.g.: Portugal has a great, free, cross-bank, ATM system since the beginning [1] because Portuguese banks were late to the party in regards to deploying such machines. They could learn from other countries and create a more resilient system, which has since been expanded to be able to…

How’s MBpay? I loved using Multibanco when living in Portugal but I never got around to using MBpay, which I think is the equivalent to what’s being discussed for the US, essentially.

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

#382

Post by jandrese »

dmitriid wrote: post #223
hashtagmarkup wrote: post #112

Earlier quoted context omitted.

"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?

In addition to the sibling comment: as already mentioned, the machinery to handle ACH (or any bank transactions, really) is very complex: - the formats (there are more than one for interbank communications) are never properly followed by any bank, and many add their own undocumented proprietary extensions to them - they are usually processed in batches, and the entirety of bank systems are built assuming that everyth…

> entries in batches may and will arrive out-of-order.

This is on purpose by some banks. They will sort the incoming queue and process withdraws before deposits to increase the number of NSF fees they collect.

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

#383

Post by jandrese »

iagovar wrote: post #284
patmorgan23 wrote: post #105

Earlier quoted context omitted.

The US has a unified payment system (ACH) and has had it for many decades it's just not instant, usually takes 3 business days for a transaction to fully settle.

So why isn't ACH used widespread?

Because the Fed sits on your money for 1-5 days so they can play with the float. It means you either need to wait out your transactions for this random length of time or take the other guy at his word that he send the money (LOL).

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

#384

Post by awad »

rorykoehler wrote: post #189
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.

It always feels like going back in time whenever an American requests a cheque. I haven't filled one in for over 15 years at this stage.

One thing about checks that perhaps doesn't get touched on a lot...plenty of businesses use them as part of their accounts payable process wherein they are invoiced on some type of payment terms (whether it's due on receipt or commonly within 30/60/90 days). An unintended but extremely (ab)used feature here is being able to pad out the actual time between receipt of invoice and when the money actually leaves your bank account because 'check is in the mail, should be there in a few days' is an acceptable answer when accounts receivable on the other end inquires about your overdue payment, effectively turning net 30 into net 40. Now, same could in theory be said for ACH since it takes up to a few days to settle depending on the hops between banks, but setting up each vendor's ACH details in a system that may or may not be set up to even do so is overhead compared to cutting checks. All in, the massive inefficiency leads to a vicious cycle of everyone in the chain getting paid late and then doing the same forward. Which sucks.

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

#386

Post by novok »

013a wrote: post #367
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…

US banks have something mostly like this: Zelle [1]; the company behind it, Early Warning Systems, is owned by JPMorgan Chase, Bank of America, Capital One, Wells Fargo, PNC, basically every bank has a stake in it, and every bank supports it. And it works better than Cash App/Venmo; enter phone number or email address, get an instant direct bank-to-bank transfer, no fees, all from the normal bank app you'd already be…

What skeeves me out about zelle is there is no fraud protection unlike most other payment methods in the USA. So I'm going to continue to use venmo, credit cards, etc:

https://techcrunch.com/2018/02/16/zelle-users-are-finding-ou...

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

#387

Post by novok »

zo1 wrote: post #332
apta wrote: post #204

Earlier quoted context omitted.

Quite scary to run financial transactions using an untyped format.

Everything is JSON these days, unfortunately.

You can apply schemas and force integers although. You also have typed serialization formats such as protobuf.

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

#388

Post by RonanTheGrey »

rorykoehler wrote: post #189
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.

It always feels like going back in time whenever an American requests a cheque. I haven't filled one in for over 15 years at this stage.

And whenever a company - even overseas ones - request a check/cheque to "verify ownership" of a checking or current account.

I'm like -- what century do you live in? Since when a) is that an appropriate way to verify an account, and b) does anyone even use cheques anymore?! Most banks don't even issue them anymore and most people don't have them.

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

#389

Post by jaywalk »

iagovar wrote: post #278
themacguffinman wrote: post #109

Earlier quoted context omitted.

A standard backed by the US government isn't going to be just another standard.

Why don't just copy what's in use in other countries? For example, sending and receiving money in the EU is pretty simple, you only need their IBAN, and maybe their name (AFAIK some countries require it). I'm not even aware of what's going on in the background, but from the user perspective its easy and free.

Well "what's going on in the background" is exactly what's being discussed here. End users will never be exposed to any of it.

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

#390

Post by rorykoehler »

awad wrote: post #384
rorykoehler wrote: post #189

Earlier quoted context omitted.

It always feels like going back in time whenever an American requests a cheque. I haven't filled one in for over 15 years at this stage.

One thing about checks that perhaps doesn't get touched on a lot...plenty of businesses use them as part of their accounts payable process wherein they are invoiced on some type of payment terms (whether it's due on receipt or commonly within 30/60/90 days). An unintended but extremely (ab)used feature here is being able to pad out the actual time between receipt of invoice and when the money actually leaves your ban…

I never understood why businesses give out free loans to other businesses like this. You used the service or got the product so you pay immediately.
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