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

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

#21

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

I wish there was a bit more detail about this part:

> The initial release of the FedNow Service will include features to help banks manage fraud risk and mitigate fraud losses. [...] In addition, there will be tools that help a financial institution investigate erroneous or suspected fraudulent transactions.

Let's say Alice's "Bank A" processes a FedNow transfer of $1,000 to Bob at Bank B. What happens if Alice calls her bank and says the payment was unauthorized?

If Bank A investigates, and finds evidence that Bob hacked Alice's account, do they then have to call up Bank B and persuade them to return the money? Does the Fed get involved as an arbiter? Or is Alice just out of luck?

(To be fair, I'm not sure exactly how this happens behind the scenes with credit/debit cards, either.)

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

#22

Post by gsatic » Thu, Jul 13, 2023, 5:11 AM UTC

Fed is moving so slowly compared to China or India. Going to be left in the dust soon.

They need to open settlements up to everyone not just "financial institutions". Fed deposit accounts for everyone or Interest bearing CBDCs should be rolled out to every one. The fucking banks need to be disintermediated from all transaction involving Depositors. Convert them to pure lenders.

If the goal is to "improve settlement efficiency without introducing liquidity or credit risks" then provide a path to get the dumb sender and receiver banks out of the loop in every dumb transaction.

If I want to send my grandma cash, why do 2 banks have to be sitting in the middle? It's 2023 get those fuckers out of the loop. So when the next bank collapses due to "credit and liquidity risks" they haven't thought about why should grandma worry about her savings?

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

#23

Post by lotsofpulp » Thu, Jul 13, 2023, 5:11 AM UTC

radlad wrote: post #19

lotsofpulp wrote: post #15

Earlier quoted context omitted.

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...

Sounds like your bank (Discover) is restricting you from transferring a certain amount of money. Why would you hold that against Zelle?

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

#24

Post by satvikpendem » Thu, Jul 13, 2023, 5:11 AM UTC

inhumantsar wrote: post #18

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.

Depending on the implementation, I could use them for retail transfers though, if I trust the other party enough. It might not be wise in most cases, due to lacking the protections of credit cards, but it could be in some.

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

#25

Post by dboreham » Thu, Jul 13, 2023, 5:12 AM UTC

radlad wrote: post #19

lotsofpulp wrote: post #15

Earlier quoted context omitted.

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...

This is all a scam to force low-volume customers to use costly wire transfers.

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

#26

Post by DiabloD3 » Thu, Jul 13, 2023, 5:13 AM UTC

sneak wrote: post #10

dcl wrote: post #8

Earlier quoted context omitted.

Why?

Hard to be easily debased, hard to mass censor/prohibit payments to unpopular organizations.

So, they just ban crypto, and then they take your precious metals.

Think I'm kidding about the last one? The US government has already taken gold from citizens (by law, and without recourse) before, and nobody did anything about it.

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

#27

Post by happymellon » Thu, Jul 13, 2023, 5:13 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.

Literally my point.

Not all banks support Zelle.

It's a 3rd party app.

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

#28

Post by raverbashing » Thu, Jul 13, 2023, 5:14 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.

If the situation was so fine and dandy you wouldn't still have $30tri of cheque transactions

"ACH takes a few days" Americans in denial about this and their "open market for tax filing solutions" is interesting

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

#29

Post by patch_cable » Thu, Jul 13, 2023, 5:15 AM UTC

woodruffw wrote: post #20

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.

Can you say more?

Zelle basically never worked for me at my local credit union (every single attempt to use it locked my account on suspicion of fraud), but I use it regularly with Chase with no issue.

How do you hope FedNow will improve on the concept?

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

#30

Post by woodruffw » Thu, Jul 13, 2023, 5:16 AM UTC

lotsofpulp wrote: post #23

radlad wrote: post #19

Earlier quoted context omitted.

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...

Sounds like your bank (Discover) is restricting you from transferring a certain amount of money. Why would you hold that against Zelle?

Zelle's job is arguably to abstract over banks; the fact that they pretend to do instant settlement by using debit transactions (which are then subject to all kinds of weird per-bank and per-network limitations) means that they fail at this basic task.