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Why it's taking so long for Americans to get payments instantly

wsj.com

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Re: Why it's taking so long for Americans to get payments instantly

#11

Post by csdreamer7 »

> The more than 300 banks it has said are using the platform represent a fraction of the roughly 9,000 U.S. banks and credit unions.

The article claims big banks lobbying with their own competitor to FedNow delayed the rollout of real-time payments, according to those industry officials. But another factor I want to point out is that the USA has more small banks (and, I assume, credit unions) than any other country on Earth; affecting the ability for the network effects of a real-time payment system to take hold.

"The U.S. has more than 4,000 small banks. That's more than any other country in the world and more than all of the small banks in the entire European Union combined."

https://www.npr.org/2023/05/04/1173488958/silicon-valley-ban...

I am a member of one of the 20 largest credit unions in the US but they only allow to receive FedNow payments. Not send them. I am assuming it is expensive to setup and many small financial institutions may not be able to support it for years down the line.

Re: Why it's taking so long for Americans to get payments instantly

#12

Post by pierat »

lotsofpulp wrote: post #10
pierat wrote: post #8

Earlier quoted context omitted.

> Interesting that not long time ago USA was at the forefront of world technology. But nowadays not so much. The entrenched players figured out that they could instead of develop, research, and make new stuff, they could cripple existing stuff, and turn everything into a rental. And the players who showed up figured the exact same. What do we get? A stagnating country. And nobody is willing to budge. Every time I try…

And yet Chinese nationals are clamoring to buy real estate in the US in order to secure their assets. Would you rather be given $10M in a US bank account, or $10M worth of Yuan in a Chinese bank account?

And the US nationals are also buying everywhere they can. But you avoid THAT discussion.

Its all about diversifying your wealth. Hell, even the elites who run HN/Ycombinator have their own escape 'end of the world bunker' in New Zealand.

https://www.bloomberg.com/news/articles/2020-04-19/-we-neede...

Try harder.

Re: Why it's taking so long for Americans to get payments instantly

#13

Post by cuteboy19 »

csdreamer7 wrote: post #11

> The more than 300 banks it has said are using the platform represent a fraction of the roughly 9,000 U.S. banks and credit unions. The article claims big banks lobbying with their own competitor to FedNow delayed the rollout of real-time payments, according to those industry officials. But another factor I want to point out is that the USA has more small banks (and, I assume, credit unions) than any other country o…

What possible use is there of having so many small banks? This is one of the only non-tech industries that scales reliably

Re: Why it's taking so long for Americans to get payments instantly

#14

Post by [deleted] »

FireBeyond wrote: post #6
akosoghaaafjdr wrote: post #4

This article doesn't really go into much detail, but this shouldn't be surprising. IT in financial services is the most insanely complicated, heavily regulated, mishmash of every technology under the sun going back about 60 years that it's a miracle it works as well as it does. This is also why fintech/insuretech/etc startups tend to fail so spectacularly...because in almost every case they severely underestimate the…

> IT in financial services is the most insanely complicated, heavily regulated, mishmash of every technology under the sun going back about 60 years that it's a miracle it works as well as it does. Australia in the late 90s had instant intra bank ACH transfers. Even inter bank was within 15 minutes. And not exactly a regulation free market.

[deleted]

Re: Why it's taking so long for Americans to get payments instantly

#15

Post by cuteboy19 »

creakingstairs wrote: post #5
akosoghaaafjdr wrote: post #4

This article doesn't really go into much detail, but this shouldn't be surprising. IT in financial services is the most insanely complicated, heavily regulated, mishmash of every technology under the sun going back about 60 years that it's a miracle it works as well as it does. This is also why fintech/insuretech/etc startups tend to fail so spectacularly...because in almost every case they severely underestimate the…

> but this shouldn't be surprising Then is it surprising that other nations have had near instant payments for a good while?

I thought so too but the US has so many banks that UPI's 120 don't sound quite as impressive

Re: Why it's taking so long for Americans to get payments instantly

#16

Post by grecy »

akosoghaaafjdr wrote: post #7
creakingstairs wrote: post #5

Earlier quoted context omitted.

> but this shouldn't be surprising Then is it surprising that other nations have had near instant payments for a good while?

No that isn't surprising because those were new buildouts of brand new systems that didn't exist before. In a lot of cases, those countries skipped over a whole bunch of in between phases, like how China skipped over a bunch of telecom infrastructure buildout and so managed to avoid a lot of similar issues there. The US digitalized it's financial industries the earliest and so it has the most pre-existing infrastruct…

> most other countries got started decades later due to a lot of factors but mostly either poverty, being behind the iron curtain, or lack of access to reliable computers

You are completely ignoring many countries here that have had instant, free transfers since the 90s.

It never ceases to amaze the lengths Americans will go to explaining why they are behind the rest of the world in some way or other while trying as hard as possible not to say "because profit".

Re: Why it's taking so long for Americans to get payments instantly

#17

Post by gsky »

lotsofpulp wrote: post #10
pierat wrote: post #8

Earlier quoted context omitted.

> Interesting that not long time ago USA was at the forefront of world technology. But nowadays not so much. The entrenched players figured out that they could instead of develop, research, and make new stuff, they could cripple existing stuff, and turn everything into a rental. And the players who showed up figured the exact same. What do we get? A stagnating country. And nobody is willing to budge. Every time I try…

And yet Chinese nationals are clamoring to buy real estate in the US in order to secure their assets. Would you rather be given $10M in a US bank account, or $10M worth of Yuan in a Chinese bank account?

Of course because China's an authoritarian country and corrupt will lose their heads if they get caught.

The worse thing is that the west providing a place for corrupt individuals.

Re: Why it's taking so long for Americans to get payments instantly

#18

Post by thomasahle »

cuteboy19 wrote: post #13
csdreamer7 wrote: post #11

> The more than 300 banks it has said are using the platform represent a fraction of the roughly 9,000 U.S. banks and credit unions. The article claims big banks lobbying with their own competitor to FedNow delayed the rollout of real-time payments, according to those industry officials. But another factor I want to point out is that the USA has more small banks (and, I assume, credit unions) than any other country o…

What possible use is there of having so many small banks? This is one of the only non-tech industries that scales reliably

> What possible use is there of having so many small banks?

This is such a strange question. Having many participants in a market simply means that nobody were able to consistently outcompete the other players.

I's like saying, why have 2 million farms in the U.S., when you could just have a few mega cooperations owning all farm land?

Re: Why it's taking so long for Americans to get payments instantly

#19

Post by dalyons »

FireBeyond wrote: post #6
akosoghaaafjdr wrote: post #4

This article doesn't really go into much detail, but this shouldn't be surprising. IT in financial services is the most insanely complicated, heavily regulated, mishmash of every technology under the sun going back about 60 years that it's a miracle it works as well as it does. This is also why fintech/insuretech/etc startups tend to fail so spectacularly...because in almost every case they severely underestimate the…

> IT in financial services is the most insanely complicated, heavily regulated, mishmash of every technology under the sun going back about 60 years that it's a miracle it works as well as it does. Australia in the late 90s had instant intra bank ACH transfers. Even inter bank was within 15 minutes. And not exactly a regulation free market.

Australia has 4ish banks. The US has 4000. It’s just not the same problem

Re: Why it's taking so long for Americans to get payments instantly

#20

Post by viraptor »

cuteboy19 wrote: post #15
creakingstairs wrote: post #5

Earlier quoted context omitted.

> but this shouldn't be surprising Then is it surprising that other nations have had near instant payments for a good while?

I thought so too but the US has so many banks that UPI's 120 don't sound quite as impressive

I don't get the "many banks" angle. Many banks may be too small to implement it. What prevented the biggest 5 or so from implementing it a decade ago and using it as a feature to get more customers? "Bank with us and get quick payments to other good banks"

Australia implemented Osko from scratch in 4 years and it took maybe 2 more before every main bank was using it. There's no need to wait for everyone.

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