51–60 of 95 posts
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
Earlier quoted context omitted.
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.
Many retailers had their hands tied, whether or not they wanted to provide a cash discount or credit card surcharge.
Earlier quoted context omitted.
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.
Will this replace ACH transfers?
With ACH most banks/financial services provide some amount of instant funds but wait 1-3 days for the transfer to complete before providing the full balance. This is very useful since it gives the bank 1-3 days to be alerted of fraud, insufficient funds issues, etc. While ACH can technically be clawed back after 3 days, it's a much more difficult process which mitigates risk by forcing the sender through a lengthy fraud claim process.
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…
ACH is daily. It really is a batch system, with a daily batch at 4:30 PM Eastern Time, and settles around 6 PM. There's a whole "undo" system built into ACH. FedNow does not have "undo".
Credit card transactions have good consumer protections in US law. The whole concept of credit card transactions is that you buy something and pay for it. Both the "something bought" and "pay for" parts are logged. And you have to be a "merchant" to accept credit cards. So you can order stuff and get a refund if it doesn't show up.
FedNow, like Zelle, seems to be only have a "pay for" part. It just sends money. Using this service with any unknown payee for anything you haven't already received (such as dinner) is probably a bad idea.
The Fed's discussion of FedNow fraud is not comforting.[1]
[1] https://www.frbservices.org/financial-services/fednow/instan...
Earlier quoted context omitted.
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.
Until Dodd-Frank, the rules for discounts on cash transactions imposed by Visa and Mastercard by merchants were much more stringent. Many retailers had their hands tied, whether or not they wanted to provide a cash discount or credit card surcharge.
Earlier quoted context omitted.
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.
Isn't Zelle one network already, that the big banks got together and made to provide a better experience than ACH? Presumably, the limits are set by each bank (for their own customers). For example, BoA has these: https://www.bankofamerica.com/online-banking/zelle-transfer-... There is no limit to receive, but if you want different limits for sending, then perhaps you should change banks? Although, the above limits s…
Zelle is lying when it says that it's a "network." All it does is shoot debit payments between supported banks; it's not doing any settlement on its own. The fact that it can be pushed around/constrained by each bank shows this.
> There is no limit to receive, but if you want different limits for sending, then perhaps you should change banks? Although, the above limits seem pretty generous for an instant, non reversible transfer of money.
I bank with a large investment bank that otherwise has excellent service (as in, "a human picks up the phone anytime of day" levels of service). I'm not going to drop them because Zelle fails to abstract over them correctly; every other third party payment app does this correctly.
> If you want to instantly transfer more than, say, $15k, then presumably you would want more reversibility.
My bank's Zelle limit is well below $15k per month, not even day. And to be clear: I don't personally care about instant settlement; I'm forced to use Zelle.
> FedNow could destabilize banks’ reliance on customer cash, fanning the flames of deposit flight
> In addition to losing revenue from the time between a payment’s initiation and settlement, banks now have to worry about deposit flight outside of business hours.
> The system isn’t expected to be ubiquitous in the U.S. for a few years.
> ...customer deposits were sticky ...That assumption allowed bankers to comfortably borrow cash at low rates and lend for long periods at higher rates.
> But instantaneous transactions allow customers to pull cash with ease, and without notice. That threatens smaller banks...
Meanwhile, the rest of the world, including countries traditionally referred to as "third-world countries," have leapfrogged the US and provide instant payment and settlement without crying about the loss of revenue from the time between initiation and settlement, or a run on their banks.