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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

#21

Post by ex3ndr »

grecy wrote: post #16
akosoghaaafjdr wrote: post #7

Earlier quoted context omitted.

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…

Like what? Most countries in europe still don't have transfers by phone number?

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

#22

Post by devoutsalsa »

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

So we don't have to pay a monthly fee of 2.95 euros just to have a bank account! Competition brings lower fees.

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

#23

Post by viraptor »

dalyons wrote: post #19
FireBeyond wrote: post #6

Earlier quoted context omitted.

> 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

It's the same problem for the biggest 4 banks. The rest can join the "future" in their own time.

It's after the first 4 that you go from trillions to billions in assets. They should have some reasonable pull. 10 should be still a low enough number to make an agreement and effectively make the rest follow or lose out.

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

#24

Post by AndrewKemendo »

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

I’d say it’s one of the more important things to not have as a single point of failure

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

#25

Post by chadash »

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

Except the parts that don’t scale. For example, some banks specialize in servicing specific communities (e.g., Chinese immigrants). Other banks understand local geographic areas well. For example, they might be able to give you a better rate on financing a gut remodel because they know your contractor does good work and your plans for the remodel will be desirable in a specific neighborhood. It’s hard to do that when you are behemoth national bank.

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

#26

Post by grecy »

dalyons wrote: post #19
FireBeyond wrote: post #6

Earlier quoted context omitted.

> 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

Scale makes no difference. You make a law (or regulation or whatever) and each bank does the work. Who cares if there are 4 or 4000, each bank just does it.

US Banks are forced to do new things all the time to remain compliant (PCI anyone?)...and they get it done.

This is not getting done because the banks make a lot of money not doing it, and lobby to keep it that way

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

#27

Post by huytersd »

borissk wrote: post #3

Interesting that not long time ago USA was at the forefront of world technology. But nowadays not so much. Even more worrying it's China that in many areas leads the world - best highway, railroad, 5G networks, digital payments everywhere, huge production of electric cars, buses and batteries. Looks like so far OpenAI, Google/DeepMind and Anthropic are ahead of Chinese companies in term of AI, but for how long? If no…

Honestly, China might get there but almost all of their technology right now is stolen technology. It seems like all new ideas still come from the US though China is pretty incredible at implementing things at scale. That is understandable given it’s an authoritarian government and they have the ability to disregard a lot of ethical matters to get shit done. On the flip side, I want to have rights and most people wouldn’t want to live in China over the US right now. It’s a good problem to have an empowered population. Can it compete with a (mostly) benevolent dictatorship? Time will tell.

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

#28

Post by toenail »

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

Ah yes, we need more too big to fail institutions.

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

#29

Post by salawat »

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

Decorrelatiom of risk. Many small redundant banks decreases odds of system threatening contagion. Large correlated businesses have catastrophic outcomes when things do eventually happen.

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

#30

Post by lxgr »

chadash wrote: post #25
cuteboy19 wrote: post #13

Earlier quoted context omitted.

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

Except the parts that don’t scale. For example, some banks specialize in servicing specific communities (e.g., Chinese immigrants). Other banks understand local geographic areas well. For example, they might be able to give you a better rate on financing a gut remodel because they know your contractor does good work and your plans for the remodel will be desirable in a specific neighborhood. It’s hard to do that when…

I hear that argument often, but I’m not convinced.

Why should efficient lending decisions somehow be uniquely hard to make in a large corporation with many local branch offices?

We’ve seen massive consolidation in mobile phone networks (where local knowledge should arguably matter just as much for where to build the next tower), supermarkets (I’d assume preferences and spending habits to also vary widely), media, and many other areas of business.

What makes banking so special? And why in the US, but not in most other countries in the world?

And if it’s a question of not having too many “too big to fail” entities: Wouldn’t it then be better to have 20-50 Chases rather than 5 Chases that still concentrate a huge chunk of customers and a long tail of thousands of tiny banks?

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