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Fed announces details of new interbank service to support instant payments

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Re: Fed announces details of new interbank service to support instant payments

#391

Post by mehrdadn »

zaroth wrote: post #346
dataflow wrote: post #306

Earlier quoted context omitted.

Unless this is actually possible in some country, I think they're both confused. But I'm guessing the objection was probably intended to convey "this is just as 'direct' in the US as it is in Australia", which would seem like a valid objection to the article.

Most country’s bank systems have a “receiving only” number which can be shared and then used by a 3rd party to directly enter an instant money transfer into the system. Because America doesn’t have the equivalent of a “receive only” code, every service has to build that functionality themselves “on top of” ACH, and prevent direct access to ACH debit and credit functionality. That being said, for $10/month any busines…

A few days ago someone here point out the numbers aren't actually "receive-only" for IBANs either, but anyway, the point you're making is a separate point from the one being made here. If anything, it's the opposite -- it's arguing that the US system is too capable, rather than insufficiently capable.

Re: Fed announces details of new interbank service to support instant payments

#392

Post by wombatmobile »

jimmaswell wrote: post #374
woodruffw wrote: post #39

Settlement between banks in the United States is astoundingly complicated, for (fascinating, terrifying) historical reasons. FedNow is a huge step towards fixing holes that private companies have been papering over for over two decades. Blatant self promotion: for anybody interested in learning more about the Automated Clearing House system (which FedNow will eventually supplement) and interbank settlement in general…

The complexity of this protocol seems to match its needs. I don't really get the issue. FTP and the file format come off as old-sounding but so what? Why can't this just be batched faster anyway? Improve the hardware, run the batches every 30 seconds, and it's just like instant systems? I know there must be a reason but I'm curious why it is.

When money takes time to go from A to B, who do you think gets to use the money? Yes, the banks. They are all set up to make money from your money, by lending it out at attractive overnight rates.

Is that a problem? Perhaps, but you've been trained to tolerate it, because you have no choice. Multiply your money by tens of millions of bank customers, and you begin to see the size of the opportunity.

Is it any wonder the status quo has lasted for so many decades since the invention of the computer?

“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”

― Upton Sinclair

Re: Fed announces details of new interbank service to support instant payments

#393

Post by chriscappuccio »

megiddo wrote: post #365
dboreham wrote: post #317

Earlier quoted context omitted.

It's worse than that if the amount is non-trivial. Wells Fargo won't allow you to send an amount over $10k instantly without physically entering a branch.

The $10K limit is a federal regulatory requirement. You have to fill out paperwork and provide identification that is turned over to law enforcement for review.

Or just use your account Chase allows online nofee wires up to $100k for instance

Re: Fed announces details of new interbank service to support instant payments

#394

Post by setr »

lopis wrote: post #298
throwaway9d0291 wrote: post #256

Earlier quoted context omitted.

> I felt like I stepped into the future. It's more like stepping out of the past. It's not that India is particularly ahead, it's that the US is particularly behind. The EU for example has essentially instant SEPA transfers now and has done for a while.

It's counter-intuitive, but if you think about it, less develop countries are in a better position to deploy fully integrated systems. E.g.: Portugal has a great, free, cross-bank, ATM system since the beginning [1] because Portuguese banks were late to the party in regards to deploying such machines. They could learn from other countries and create a more resilient system, which has since been expanded to be able to…

FYI, the term for this is leapfrogging -- essentially the lack of infrastructure allows developing countries to suddenly advance past established countries in terms of policy/tech integration & utilization. In other words, no tech debt to pay off first :-)

https://en.wikipedia.org/wiki/Leapfrogging

Re: Fed announces details of new interbank service to support instant payments

#395

Post by atombender »

013a wrote: post #367
koopuluri wrote: post #216

I moved to India at the start of the year and there's the Universal Payment Interface (UPI) here that essentially allows a Venmo like interface to transfer $ instantaneously from any bank account to another - by simply using the recipient's phone number or a QR code. There are multiple apps that interface with UPI, and the barrier to entry isn't high - allowing for good competition on the UX. Literally every person I…

US banks have something mostly like this: Zelle [1]; the company behind it, Early Warning Systems, is owned by JPMorgan Chase, Bank of America, Capital One, Wells Fargo, PNC, basically every bank has a stake in it, and every bank supports it. And it works better than Cash App/Venmo; enter phone number or email address, get an instant direct bank-to-bank transfer, no fees, all from the normal bank app you'd already be…

Zelle is not supported by every bank. A major exception is Charles Schwab.

Re: Fed announces details of new interbank service to support instant payments

#396

Post by rektide »

The Fed wants transfers to go through them.

I hope not. What incompetent assholes.

Hopefully the banks start taking making public consumer/business/bank facing standard apis seriously cause this is a shit show disaster. This is not a role the fed should be taking.

Re: Fed announces details of new interbank service to support instant payments

#397

Post by temp667 »

013a wrote: post #367
koopuluri wrote: post #216

I moved to India at the start of the year and there's the Universal Payment Interface (UPI) here that essentially allows a Venmo like interface to transfer $ instantaneously from any bank account to another - by simply using the recipient's phone number or a QR code. There are multiple apps that interface with UPI, and the barrier to entry isn't high - allowing for good competition on the UX. Literally every person I…

US banks have something mostly like this: Zelle [1]; the company behind it, Early Warning Systems, is owned by JPMorgan Chase, Bank of America, Capital One, Wells Fargo, PNC, basically every bank has a stake in it, and every bank supports it. And it works better than Cash App/Venmo; enter phone number or email address, get an instant direct bank-to-bank transfer, no fees, all from the normal bank app you'd already be…

God - Zelle is HORRENDOUS.

Seriously - check out your limits. I can ACH into the 100's of thousands but I can zelle basically nothing - I don't think you could run even a small payroll on zelle or make even a medium sized purchase with it.

The fraud story is horrendous.

The traceability and audit-ability of things is horrendous - seriously -> you CANNOT see where the funds are and no one will tell you / can tell you.

With a cancelled check image I get the back and I can trace down what account it went into if need be.

With a wire I get my reference number and can trace status that way.

With NACHA I can do Payment Trace Requests...

Zelle - forget it, the money is GONE and no way to trace who got it.

Zelle is horrendous and cannot die soon enough. How are people even considering this as a settlement service?

For context - Fedwire does something like trillions of dollars per day in activity. NACHA at least $100B per day+.

Re: Fed announces details of new interbank service to support instant payments

#398

Post by mixmastamyk »

cowsandmilk wrote: post #282
djsumdog wrote: post #214

Earlier quoted context omitted.

My first job out of university was working for a debt collection firm that made its own ACH engine in Perl. I remember all the 99999s and headers and stuff. I didn't work very much on the engine though (thankfully). I was pretty shocked at just how far behind the American banking system was when I lived overseas for a bit. I wrote about it here: https://battlepenguin.com/tech/the-american-banking-system-i...

Your blog article is startlingly incorrect pretty early on. Individuals can and do use ACH between each other all the time. It is literally how paper checks work in the US. And I’ve been able to use a routing number and account number to send money to someone else online via ACH for decades...

I tried that two months ago and the bank didn't support it, unless I was holder of both accounts.

Re: Fed announces details of new interbank service to support instant payments

#399

Post by zxcvbn4038 »

madamelic wrote: post #182
pacaro wrote: post #114

Earlier quoted context omitted.

Banking in general and international banking, predate the US London, Glasgow, Budapest and Paris all have metro systems that predate the New York Subway There are multiple bridges that are still in use that predate European colonization of North America While the oldest airport is in the US, (College Park), Hamburg, Bucharest, Bremen, Rome, Amsterdam, Paris, Sydney all follow very shortly after AFAICT Skyscrapers is…

I have always been under the impression it is because the US wasn't bombed to bits during WWII and didn't basically get to re-think infrastructure.

In the case of banking you have to realize that US bank accounts here are often completely free, but they will charge you a penalty for anything and everything that is a result of action or inaction on your part (its always your fault). Everything is designed to maximize the chance of your making a mistake so they can charge you a fee.

Re: Fed announces details of new interbank service to support instant payments

#400

Post by mixmastamyk »

blisseyGo wrote: post #247
koopuluri wrote: post #216

I moved to India at the start of the year and there's the Universal Payment Interface (UPI) here that essentially allows a Venmo like interface to transfer $ instantaneously from any bank account to another - by simply using the recipient's phone number or a QR code. There are multiple apps that interface with UPI, and the barrier to entry isn't high - allowing for good competition on the UX. Literally every person I…

> instantaneously from any bank account to another I am already able to do that with eTransfer. That's how I pay my rent and haven't had any problems.

The rest of the developed world can do that from their bank, no financial data-selling middleman required. Oh, and for a decade or two.
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