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An update on the Federal Reserve’s Instant Payments Service

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

#41

Post by orangepurple »

dboreham wrote: post #25
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...

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

Even those wire transfers are not instantaneous. They often don't get sent on weekends and you have to wait hours. Sometimes days like in the case of Synchrony bank. You have to call customer service to initiate a wire from them too. What a shit show.

Meanwhile, iDEAL exists for so long and its effortless. Just not for Americans. https://dutchreview.com/expat/financial/what-is-ideal/

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

#42

Post by [deleted] »

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…

[deleted]

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

#44

Post by lotsofpulp »

raverbashing wrote: post #28
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.

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

I did not say it was fine and dandy, but it has been pretty easy to instantly send and receive money in the US for years now.

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

#45

Post by lotsofpulp »

orangepurple wrote: post #38
lotsofpulp wrote: post #31

Earlier quoted context omitted.

Zelle is owned and operated by the biggest banks in the US, it's basically like using your own bank. You do not even have to use the Zelle app, you can just log into your bank's app and transfer money from there. And sure, there would have been no need for it to exist had the US government done its job 20+ years ago as opposed to waiting until the 2020s, but the reality is that most Americans have been able to instan…

Please explain to me how the government prevented instantaneous ACH transfers. Zelle is a shitty middleman with ridiculously low transfer limits.

Zelle does not set transfer limits, the banks do. For example:

https://www.bankofamerica.com/online-banking/zelle-transfer-...

Zelle is just a payments network.

https://en.wikipedia.org/wiki/Zelle_(payment_service)

Also, as far as I understand, the mechanism of ACH prevents it from being instantaneous, requiring old school processes every night to reconcile and finalize transactions. ACH does not check if accounts have money in real time, it assumes it, and then deals with problems later, which is why transactions take days to finalize.

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

#46

Post by woodruffw »

patch_cable wrote: post #29
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?

Sure.

I was a Chase customer for a long time, and I tried to enroll with Zelle through Chase. This failed in two separate ways:

1. I was unable to enroll through Chase: I got everything ranging from generic error pages, to server errors, to actual Java stack traces in both my email and browser.

2. I was unable to enroll directly through Zelle's site: their site would claim that I was already enrolled, invite me to log in, and then...not log in.

It took weeks to get a combination of Chase and Zelle's customer service to (1) acknowledge the issue, and (2) diagnose it: Zelle appears to (or did) use US phone numbers as primary keys, and I was partially registered in two separate places. They didn't have a resolution available to me so I told them to delete my account entirely, which they said they did.

Fast forward about 3 years: I'm no longer a Chase customer. For unrelated reasons, I am asked to attempt to use Zelle again. I try and enroll, only to discover that:

1. Zelle can only be linked to one bank at a time;

2. Chase never actually bothered to un-enroll me.

At this point, I'm no longer a customer of Chase, and have no active account to reference. I can't log into either Chase or Zelle to "un-enroll" this account that doesn't exist, and neither is willing to do it for me. I end up convincing the person that wanted me to use Zelle that it's fundamentally broken, and ignore it.

Fast forward another year: I am now forced to use Zelle. This time, somehow, my new bank is able to enroll me. I log into Zelle to make a payment; I am instantly banned for having "insufficient personal information" (how this is possible is unclear to me; it is literally linked to all the information on my bank account). I convince my bank to talk to Zelle and unban me, and finally things mostly "work": I can enter a crappy webview within my bank's app to send money through Zelle. Except that I still have to split it into smaller payments, since Zelle uses the debit network for settlement and won't let me send very modest amounts of money in single amounts.

To summarize: after about 6 years of fighting, I can half-use Zelle by splitting already small payments into smaller payments. I have to be careful about when I split these payments, because if I do them on the wrong calendar intervals I exceed my "monthly limit" and have to wait another month to make essential payments. Getting to this state took literal dozens of phone calls with two banks and Zelle themselves.

> How do you hope FedNow will improve on the concept?

I hope none of the above will ever happen to me again.

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

#47

Post by lotsofpulp »

cvalka wrote: post #39
lotsofpulp wrote: post #31

Earlier quoted context omitted.

Zelle is owned and operated by the biggest banks in the US, it's basically like using your own bank. You do not even have to use the Zelle app, you can just log into your bank's app and transfer money from there. And sure, there would have been no need for it to exist had the US government done its job 20+ years ago as opposed to waiting until the 2020s, but the reality is that most Americans have been able to instan…

LOL. The Zelle limits are ridiculously low. Most Americans don't have online access to transferring money. Wire and ACH online transfers are usually not available to the average b2c consumer.

Only the smallest local bank or credit union would not have the ability to transfer money online via ACH for their customers. Pretty much everyone can login, go to the transfers tab, and enter an account/routing number to transfer money to (or give their account/routing number to another bank to transfer money in).

If you do not, then you should probably sign up for a free account at any of the multitude of online banks that do have the capabilities.

For example, at CIT Bank, which I easily opened a free online account, I have ACH limits of $250k outgoing and $500k incoming, PER DAY. All I had to do was enter my account #/routing # for my other bank accounts.

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

#48

Post by oasisbob »

synetic wrote: post #13
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.

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.

In the US, your debit card and credit card are protected by the same dispute rules under Regulation E.

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

#49

Post by gs17 »

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...

My landlord also wants Zelle. My bank limits it to $1000 per day, but even if I was willing to pay over multiple days, Zelle will not deliver to their account. They also said they can't increase the limit, and can't tell me what the other issue is. My girlfriend is at a different bank, with both no limit and the payments actually go through. I Zelle her my half of the rent and it "works".

I really need to switch banks.

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

#50

Post by raverbashing »

cuuupid wrote: post #35
raverbashing wrote: post #28

Earlier quoted context omitted.

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

I don’t know how this devolved into an America bashing thread but it’s worth noting that cheque transactions have other causes. You could make the same argument about the popularity of cash as a payment method abroad. ACH sucks but Zelle is at least second party; every major bank supports it and I don’t need any details to transfer money beyond their phone number.

Well, cash is cash, I don't think its use is mainly due to lack of technology access (for the most part)

Apart from cashier's cheques (which also are pretty rare in places with functioning quick payment systems) what do you think are the other uses of cheques?

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