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

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

#71

Post by JumpCrisscross »

pierat wrote: post #12
lotsofpulp wrote: post #10

Earlier quoted context omitted.

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.

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

Because it's wrong. America remains a net investment destination [1]. China is a net investor [2]. These metrics can't be evaluated in a vacuum, but broadly speaking, foreigners invest in America; the Chinese invest abroad.

> even the elites who run HN/Ycombinator have their own escape 'end of the world bunker' in New Zealand.

This is a silly meme. For starters, if America goes fascist it's not like they'll blanche because the kiwis said no.

[1] https://www.bea.gov/news/2023/us-international-investment-po...

[2] https://www.safe.gov.cn/en/2023/0331/2063.html

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

#72

Post by kelnos »

pmontra wrote: post #64
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…

According to the Bank of Italy there were 439 banks in Italy in 2022 down from 684 in 2013. [1] GDP of USA and Italy: 26.95 and 2.19 trillion dollars. [2] GDP/banks (if it makes any sense but bear with me) : 26.95/9000 = 0.0029 and 2.19/439 = 0.0049 So yes, money per bank is less in the USA but only by a factor of 2. It's in the same order of magnitude. It's also a much larger and sparse country (at least in some are…

I don't think GDP is a reasonable proxy for value of bank deposits.

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

#73

Post by brnt »

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…

[flagged]

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

#74

Post by mb5 »

kelnos wrote: post #72
pmontra wrote: post #64

Earlier quoted context omitted.

According to the Bank of Italy there were 439 banks in Italy in 2022 down from 684 in 2013. [1] GDP of USA and Italy: 26.95 and 2.19 trillion dollars. [2] GDP/banks (if it makes any sense but bear with me) : 26.95/9000 = 0.0029 and 2.19/439 = 0.0049 So yes, money per bank is less in the USA but only by a factor of 2. It's in the same order of magnitude. It's also a much larger and sparse country (at least in some are…

I don't think GDP is a reasonable proxy for value of bank deposits.

It isn’t, but I don’t think the parent comment is trying to use it like that - they’re going for “how many banks are needed to support an economy”. Otherwise deposits per bank or perhaps assets (loans etc) per bank would be much better choices.

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

#75

Post by Animats »

hakfoo wrote: post #61
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…

The whole "their own competitor" (Zelle) thing seems sort of weird. It hit the market well after people were seeing FedNow on the horizon. Why bother building something expensive that's obviously going to be obsolete in a few years? If it was meant to compete with PayPal/Cashapp/Venmo, it was 10-15 years too late for that. Anyone who wanted it had it already. I wonder if the value of Zelle is that it's still a privat…

"Their own competitor" is a commercial service called RTP.[1] This does bank to bank push transfers (unlike ACH, you cannot debit others) in near real time. Costs banks $0.045 per transfer. There's also a system which allows sending documents along with a Request for Payment (usually a bill), and that process adds an extra $0.11.

[1] https://www.theclearinghouse.org/payment-systems/rtp

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

#76

Post by gordon_freeman »

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

Having competition and options for customers would incentivize banks to provide good service affordably. Also, having local/regional/small banks in sparsely populated areas also fills a gap where big banks do not want to be due to economics and the ROI of cost/benefit. And not all customers can use digital tools to fulfill their banking needs and would like a physical bank nearby for their needs.

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

#77

Post by Symbiote »

loxias wrote: post #65
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?

God no, hah! Not surprising at all. They didn't have first mover disadvantage. There's a cost to being the first to invent infrastructure. Others can stand on your shoulders and build improvements, while you're stuck with "version 1.0". Other nations might have instant payments for a good while, but the US had viable banking and a postal service for more than 200 years. The cost of being first is sometimes being last…

Barclays Bank was founded before the USA, and it's not even the oldest British bank, let alone the oldest European one.

The postal services of many European countries also predate the USA.

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

#80

Post by ZeroSolstice »

ttymck wrote: post #43
ZeroSolstice wrote: post #33

"Fed delays have cost consumers hundreds of billions in overdraft fees, check-cashing fees and late fees, said Aaron Klein, a senior fellow at the Brookings Institution." Why would banks be incentivized to speed up this process? They make money off the delay and get to blame the Federal government. Its the same reason a purchase can be done instantly but then it takes up-to (10) business days to be refunded. Banks an…

Retailers make a significant return on interest? Can you help me identify what keywords I would look for in a P&L to see this?

"Large companies and financial institutions also often "play the float" with larger sums for-profit—namely, the interest income they earn on an amount by speeding up its deposit into their accounts or slowing down a presentation for payment[1]."

IMF eLibrary with some example scenarios[2]. Granted they speak of most of the float data being analyzed with checks, it doesn't seem unreasonable to replace "check" with "credit card" transaction.

[1] https://www.investopedia.com/terms/f/float.asp

[2] https://www.elibrary.imf.org/display/book/9781557753861/ch10...

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