[dead]
Why it's taking so long for Americans to get payments instantly
111–120 of 149 posts
Re: Why it's taking so long for Americans to get payments instantly
#112Earlier quoted context omitted.
> 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?
> Having many participants in a market simply means that nobody were able to consistently outcompete the other players. Yeah, no. The tiny bank in Arkansas isn't participating in the same market as the tiny bank in Alabama. But the large bank from New York wasn't allowed to compete in Alabama by state regulators.
[dead]
Re: Why it's taking so long for Americans to get payments instantly
#113> 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…
Zelle must have brought something to the table the others didn't: My bank provides an interface for Zelle on their website, letting you send payments without having to go through creating or linking an account. It never had any of the others.
Re: Why it's taking so long for Americans to get payments instantly
#114Earlier quoted context omitted.
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…
I think the network issues you mentioned are relatively simple engineering issue, you can easily hire and delegate.
Banks have the issue with delegating power to give you money. From a distance I'd guess there is a real advantage to businesses of local banks and being able to work on personal relationships.
You never have a relationship with a big company, you are just an entry in a database interacting with an algorithm.
Re: Why it's taking so long for Americans to get payments instantly
#115Isn’t this the exact problem that cryptocurrencies solve? With stablecoins, you can send any amount of money anywhere in the world for almost no cost.
Crypto doesn't add anything to this situation a normal business can do it. PayPal, Venmo etc
Re: Why it's taking so long for Americans to get payments instantly
#116"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…
Wow thats crazy most refunds here (UK) take 1-2 days max
Re: Why it's taking so long for Americans to get payments instantly
#117"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…
Wow thats crazy most refunds here (UK) take 1-2 days max
Amazon online, normal minutes
Re: Why it's taking so long for Americans to get payments instantly
#118Earlier 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
> Australia has 4ish banks. The US has 4000. It’s just not the same problem
Your right in thinking the situation is different between the USA and Australia, but the different isn't 4ish vs 4,000 (it's really 100ish vs 4,000).
The immediate reason is that Australia solves these problems from the top down. We've done it over and over in banking. Credit cards were pushed down decades ago (ergo, we haven't needed cheques in that long), then EFTPOS with Chip&Pin (no signature) was pushed down, plus a list of other things. The latest thing (in the last few years) is the Reserve bank of Australia's new payments platform: https://www.rba.gov.au/payments-and-infrastructure/new-payme.... Osko is a instantaneous bank transfer system for us retail plebs that is built on top of it. Meanwhile the USA hasn't pulled this off once.
If you look deeper at Australia, you will see it isn't just banking. There was a recent headline here about engineered stone being banned. Wiping out an industry was Australias solution to it killing too many tradesmen in their 30's. In general strong federal level laws aimed at creating efficient markets is something the Australian system does, and it's something Australia's seem very comfortable with. The USA on the other hand is just hopeless at it, and the USA voting public phobia's about "big government" boil to the surface every time they try. An example of something the rest of the world pulled on that the USA can't: metric. And without that sort of leadership from the top you have no hope of corralling a herd of banks so they move in the same direction.
Re: Why it's taking so long for Americans to get payments instantly
#119> 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…
Banks are probably a bit hesitant to unlock instant payments because they can’t be reversed and so they will be a juicy target for perpetrating fraud. I’m confident they’ll be rolled out eventually but I think it’s going to take a little time for banks to figure out what the right controls for the feature should be.
I am not sure how UPI is actually implementing it, but I remember reading am article about charge backs coming to upi for large transactions.
Re: Why it's taking so long for Americans to get payments instantly
#120Cash is instant and I use it all the time