61–70 of 185 posts
Didn't get a mention in the article but Singapore's PayNow is magical. Direct bank-to-bank transfers that operate instantly 24/7, and for free. QR code-based so it's not uncommon to pay at retail outlets with this method; some shops will only accept PayNow or cash, because they're free. You can also pay directly to someone's NRIC (national ID number) or mobile number so you don't have to tack in their bank details or…
The article is probably right about FedNow likely not drastically improving things immediately, but maybe people will build good products on top of it over the coming years. The launch is for late July https://www.frbservices.org/news/press-releases/062923-organ...
Why can't it be setup in a way where people don't have to build good products on top of it? Why leave room for rent seeking?
In computing terms, think of FedNow as something like TCP: it's very low in the OSI hierarchy and not meant to be used directly by users. The hope is that it will enable nicer applications to be built on top of it, things which are not really possible to build on top of ACH, but it is not a payment application in and of itself.
Didn't get a mention in the article but Singapore's PayNow is magical. Direct bank-to-bank transfers that operate instantly 24/7, and for free. QR code-based so it's not uncommon to pay at retail outlets with this method; some shops will only accept PayNow or cash, because they're free. You can also pay directly to someone's NRIC (national ID number) or mobile number so you don't have to tack in their bank details or…
Canada has that too, it's great!
Didn't get a mention in the article but Singapore's PayNow is magical. Direct bank-to-bank transfers that operate instantly 24/7, and for free. QR code-based so it's not uncommon to pay at retail outlets with this method; some shops will only accept PayNow or cash, because they're free. You can also pay directly to someone's NRIC (national ID number) or mobile number so you don't have to tack in their bank details or…
Canada has that too, it's great!
I've always wondered why big banks don't implement a lot more technologies, and I guess this gets to some of it. But it does seem like banks would have the incentives to kill services like Venmo and Stripe overnight. Like why are there not clear and straightforward banking APIs that let me create virtual cards and why doesn't my app let me just transfer money directly to my friend's bank account (I get global being a…
Plenty of banks are competing with Venmo and Cashapp. They use Zelle[1], it's zero-fee and included in most bank apps already. But it's not intended for business payments like Stripe or PayPal, or Venmo for business. [1] https://www.zellepay.com/get-started
I've always wondered why big banks don't implement a lot more technologies, and I guess this gets to some of it. But it does seem like banks would have the incentives to kill services like Venmo and Stripe overnight. Like why are there not clear and straightforward banking APIs that let me create virtual cards and why doesn't my app let me just transfer money directly to my friend's bank account (I get global being a…
India has done this for more than a decade at this point with IMPS and NEFT, and recently UPI. And I'm sure several other countries have them too, but for some reason the US chooses to remain backwards in this case.
1. When I pay with a credit card, I haven't actually spent any money. That money is still in my bank account, and I have the chance to dispute the transaction if it's fraudulent, without putting my own money on the line first. I've heard a few horror stories where a merchant/service has mis-charged a debit card or ACH transfer, and the time it took to get the money back caused stress around things like making rent payments. It frankly doesn't matter to me how common or uncommon such a thing is; it's literally impossible when paying for a credit card. (Yes, I do have to trust that the credit card issuer themselves won't make an error when debiting my bank account when the bill is due, but I prefer only having to trust one party not to make mistakes, than some larger number.)
2. While everyone is of course paying for this through higher prices in stores, I'm reasonably savvy about using credit cards that give me cash back or rewards points or something, and tailoring what card I use to benefit a particular transaction (for example, one card might give 3% back on grocery purchases, while another might give me 3x points on travel expenses). Ultimately I end up paying a bit less for everything than if I were to use cash or a debit card (or a bank transfer). Certainly some merchants have credit card surcharges, or discounts for paying cash/debit, but I find that those are a tiny percentage of my transactions, and I can always use cash or debit in those instances. It's hard to say how much (if at all) prices would actually be lower if credit cards (and their associated fees) didn't exist; handling cash isn't free either for businesses (counting/reconciliation, storage areas, security for transport to a bank, etc.).
The main issue with our useless bank-transfer payments system is person-to-person payments. But these days, with Venmo, Cash App, and Zelle, that issue rarely comes up (and all of these are free for the sender if you use bank debit rather than a credit card). I can't remember the last time I had to give money to a friend that involved using cash. The big downside of all of these (similar to cash, I guess) is that there's very little fraud protection. If you send someone money, and they screw you over, you might not have much recourse.
I very much consider our banking system backwards in many ways, but I find our payments system to be just fine, and, in some ways, quite good. And our banking system is backwards in part due to lack of demand.
As someone who's not entirely opposed to crypto, this was an interesting read. Mostly in terms of the following: I sort of assumed that one of the factors (among many, for sure) limiting widespread adoption of crypto was that the thing we (in the US) already have was probably pretty smooth? And reading this, seems like it really ain't. Interesting that crypto hasn't made inroads here. I mostly get why, incumbents don…
> Interesting that crypto hasn't made inroads here A funny thing happened, 10 years ago crypto transfers were free, and bank transfers cost $15 or more. Today the opposite is true, many bank transfers are free, but sending crypto costs about $10.
You're already getting roasted for this, but the larger picture / issue is that many people have this outdated view.
The technology has moved so fast, in just a few years that it is hard for everyone, even such a technical group as HN, to keep up.
I've always wondered why big banks don't implement a lot more technologies, and I guess this gets to some of it. But it does seem like banks would have the incentives to kill services like Venmo and Stripe overnight. Like why are there not clear and straightforward banking APIs that let me create virtual cards and why doesn't my app let me just transfer money directly to my friend's bank account (I get global being a…
I worked for a couple of banks. The older the bank is, the difficult it is to 'implement a lot more technologies'. They have the old COBOL codebase running on mainframes from 70's, then a lot of Java, COBRA interfaces that deal with this ancient, but reliable COBOL in the backend. Who is going to implement these technologies 'without being responsible for failures'? Modern management is all about taking credit for su…
Earlier quoted context omitted.
> I mostly get why, incumbents don't like change, but still. Or most likely, poor KYC/Fraud controls, lack of a central counterparty clearing house, limited performance, terrible UX...
These are all things that a theoretical crypto-based competitor could work on.