An update on the Federal Reserve’s Instant Payments Service • Hacker News Board

Re: An update on the Federal Reserve’s Instant Payments Service

#11

Post by happymellon » Thu, Jul 13, 2023, 4:59 AM UTC

I always found it funny when dealing with the money transfer to folks in the US that they had to use terrible 3rd party apps to move money between accounts.

You end up in situations where moving money can almost be impossible when the banks don't support the same apps. Here in the UK immediate transfers between accounts has been a thing for a very long time.

Glad to see the US catching up, because sometimes the pace of technology is amazing and other times with much simpler things it's positively archaic.

Re: An update on the Federal Reserve’s Instant Payments Service

#12

Post by lotsofpulp » Thu, Jul 13, 2023, 5:00 AM UTC

mikepurvis wrote: post #9

kyrra wrote: post #6

Earlier quoted context omitted.

We already have debit card and the related networks (like Star) that are cheaper. People are just used to Visa, and like the rewards.

That seems surprising to me as Canada's equivalent system (Interac) is very popular.

Generally, retailers like credit cards because people usually spend more money when they pay with credit cards.

That is why you do not see major US retailers offer discounts for paying with cash/debit card/ACH. The only one I can think of is Target, that offers 5% off if you use Target Redcard, which can be linked to your bank account.

Re: An update on the Federal Reserve’s Instant Payments Service

#13

Post by synetic » Thu, Jul 13, 2023, 5:01 AM UTC

kyrra wrote: post #6

satvikpendem wrote: post #3

This would be great if it can cut down payment processor fees which are mainly driven by the rates that Visa and MasterCard charge, essentially as a duopoly power in the market. They also control what you can and can't buy, such as for example heavily frowning upon adult content, even if you are legally an adult.

We already have debit card and the related networks (like Star) that are cheaper. People are just used to Visa, and like the rewards.

I don’t use debit cards because it’s less secure than using a credit card. If I dispute a charge on a credit card I’m more likely to have a positive outcome than if I use a debit card. With a debit card the money is taken out of your bank account at the point of purchase. It’s hard to get it back in if I was charged inappropriately.

Re: An update on the Federal Reserve’s Instant Payments Service

#14

Post by Nursie » Thu, Jul 13, 2023, 5:02 AM UTC

boomchinolo78 wrote: post #7

satvikpendem wrote: post #3

This would be great if it can cut down payment processor fees which are mainly driven by the rates that Visa and MasterCard charge, essentially as a duopoly power in the market. They also control what you can and can't buy, such as for example heavily frowning upon adult content, even if you are legally an adult.

I've seen small towns adopt cash only payments to curtail this. Why should the tax pay effectively a 2%+ tax on the economic activity of the town. Imagine a bunch of people living there, transacting with each other, 2% tax for every movement?

On some levels yes, if getting and keeping cash is your aim, it can work.

But there are costs associated with cash too. It has to be stored safely, counted and reconciled, banked (not always free) etc etc.

I’m not saying credit card fees are ‘cheap’, especially not in the US where they seem to be quite high to support the cashback economy, but cash isn’t free for a business either.

Re: An update on the Federal Reserve’s Instant Payments Service

#15

Post by lotsofpulp » Thu, Jul 13, 2023, 5:04 AM UTC

happymellon wrote: post #11

I always found it funny when dealing with the money transfer to folks in the US that they had to use terrible 3rd party apps to move money between accounts. You end up in situations where moving money can almost be impossible when the banks don't support the same apps. Here in the UK immediate transfers between accounts has been a thing for a very long time. Glad to see the US catching up, because sometimes the pace…

All the major banks in the US have supported online ACH or Zelle money transfers for over a decade now. ACH takes a few days, Zelle is instant, but there has not been a need to use 3rd party apps for many years.

Re: An update on the Federal Reserve’s Instant Payments Service

#16

Post by uneekname » Thu, Jul 13, 2023, 5:04 AM UTC

If this is what I think it is, I can't wait. My bank's Zelle experience is abysmal, and it's annoying to manage a Venmo balance. I will strongly consider switching banks if it means a convenient FedNow UX

Re: An update on the Federal Reserve’s Instant Payments Service

#17

Post by seewhydee » Thu, Jul 13, 2023, 5:05 AM UTC

In my country (Singapore), the instant payments system was rolled out in 2017 but took several years to get traction. The pandemic seems to have marked a turning point: it's now accepted pretty much everywhere, and it's great. You can use it to pay plumbers, small-scale food vendors who don't take credit cards, car workshops, people on Craigslist, friends you split a bill with, etc. Very convenient.

Re: An update on the Federal Reserve’s Instant Payments Service

#18

Post by inhumantsar » Thu, Jul 13, 2023, 5:06 AM UTC

satvikpendem wrote: post #3

This would be great if it can cut down payment processor fees which are mainly driven by the rates that Visa and MasterCard charge, essentially as a duopoly power in the market. They also control what you can and can't buy, such as for example heavily frowning upon adult content, even if you are legally an adult.

This is for bank to bank transfers, like ACH but different. It won't be used for retail payments directly, though it could make them cheaper in the long run.

Re: An update on the Federal Reserve’s Instant Payments Service

#19

Post by radlad » Thu, Jul 13, 2023, 5:07 AM UTC

lotsofpulp wrote: post #15

happymellon wrote: post #11

I always found it funny when dealing with the money transfer to folks in the US that they had to use terrible 3rd party apps to move money between accounts. You end up in situations where moving money can almost be impossible when the banks don't support the same apps. Here in the UK immediate transfers between accounts has been a thing for a very long time. Glad to see the US catching up, because sometimes the pace…

All the major banks in the US have supported online ACH or Zelle money transfers for over a decade now. ACH takes a few days, Zelle is instant, but there has not been a need to use 3rd party apps for many years.

IMO, Zelle qualifies as a terrible 3rd party app...

My landlord takes payment via Zelle, and I tried to setup a payment from Discover but it told me that my limit was something ridiculously low like $500. I called to ask them to increase it and they said they were unable to.

Meanwhile, I can send huge amounts from my Ally bank account with Zelle...

Re: An update on the Federal Reserve’s Instant Payments Service

#20

Post by woodruffw » Thu, Jul 13, 2023, 5:10 AM UTC

It's petty of me, but I hope that FedNow utterly eradicates Zelle: I've spent my entire life in the mess that is the US's banking system, and every trouble I've ever had pales in comparison to the troubles that Zelle gives me on a near-daily basis.