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An update on the Federal Reserve’s Instant Payments Service

clevelandfed.org

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

#61

Post by patch_cable »

woodruffw wrote: post #46
patch_cable wrote: post #29

Earlier quoted context omitted.

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 lo…

Yeah, that sounds about right.

While I was with the credit union, the buck was just passed between them and Zelle. Zelle seems to have been set up assuming that banks will somehow support it, and either they’re not actually prepared to do it or not given the proper tools to detangle the mess.

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

#62

Post by KingMachiavelli »

gsatic wrote: post #22

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 e…

If you're actually interested in why the US banking is so fragmented, it's on purpose and it works very well. The US wants banks to be small to distribute risk and encourage local investment. Small banks and credit unions are much more willing to give small business loans, auto loans, etc. to people/clients with worse credit, etc. These policies only work if small and medium banks have depositors so that's why everyone has a different local bank, etc.

> ...worry about her savings

All deposit accounts are insured up to $250k and (given recent events) unlikely the Fed would even allow any regular persons deposits to be at risk. Essentially, the Fed can't loan or invest like small/medium banks can. The Fed can't go bankrupt so it has no real way to measuring risks when giving out loans which would make it impossible to price loans.

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

#63

Post by lotsofpulp »

KingMachiavelli wrote: post #62
gsatic wrote: post #22

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 e…

If you're actually interested in why the US banking is so fragmented, it's on purpose and it works very well. The US wants banks to be small to distribute risk and encourage local investment. Small banks and credit unions are much more willing to give small business loans, auto loans, etc. to people/clients with worse credit, etc. These policies only work if small and medium banks have depositors so that's why everyo…

What does any of that have to do with electronically sending and receiving money?

gstatic is correct with this:

>If I want to send my grandma cash, why do 2 banks have to be sitting in the middle?

The US government should be offering electronic money accounts to everyone as a utility, and they should be constitutionally guaranteed (even to felons), with no ability to lose them. Anyone should be able to send and receive money at any time. In conjunction, US government should also provide identity verification services as a utility, utilizing the USPS, which they already use to verify identity for US passports.

If people then want to invest their money, then they can make that choice individually.

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

#65

Post by giantrobot »

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.

Adult content has a stupidly high chargeback rate. Chargebacks are expensive and card processors don't like adult content for that reason.

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

#66

Post by synetic »

oasisbob wrote: post #48
synetic wrote: post #13

Earlier quoted context omitted.

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.

My guiding principle is that it’s best to not let someone take money out of your bank account since putting it back in is a hassle. What happens in this scenario: You use a debit card to purchase something from eBay and what you got isn’t what was promised. eBay sides with the seller. What recourse do you have? With a credit card, in the worst case scenario, I just don’t pay the credit card company. I don’t care about credit ratings and credit card companies won’t sue me for the money. They’ll just ding my credit rating.

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

#67

Post by raincom »

nancyhn wrote: post #64

Remember this story from a couple months ago? https://news.ycombinator.com/item?id=36041059 Does this system prevent abuse?

Using Fednow is no worse than using zelle/venmo/paypal when it comes to such abuse. Law enforcement agencies have direct access to banks these days.

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

#68

Post by satvikpendem »

giantrobot wrote: post #65
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.

Adult content has a stupidly high chargeback rate. Chargebacks are expensive and card processors don't like adult content for that reason.

Well if it's a direct bank to bank transfer, there's no chargeback, problem solved. Of course, you assume a lot more risk for getting back that 3% transaction fee, but if you know what you're buying, at least you can make the purchase you want to.

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

#69

Post by orangepurple »

lotsofpulp wrote: post #63
KingMachiavelli wrote: post #62

Earlier quoted context omitted.

If you're actually interested in why the US banking is so fragmented, it's on purpose and it works very well. The US wants banks to be small to distribute risk and encourage local investment. Small banks and credit unions are much more willing to give small business loans, auto loans, etc. to people/clients with worse credit, etc. These policies only work if small and medium banks have depositors so that's why everyo…

What does any of that have to do with electronically sending and receiving money? gstatic is correct with this: >If I want to send my grandma cash, why do 2 banks have to be sitting in the middle? The US government should be offering electronic money accounts to everyone as a utility, and they should be constitutionally guaranteed (even to felons), with no ability to lose them. Anyone should be able to send and recei…

Instead what will happen is they will gamify your deposits (see what the WEF says about CBDCs) or freeze them because you hit some AML rules and you will have no recourse

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

#70

Post by lotsofpulp »

orangepurple wrote: post #69
lotsofpulp wrote: post #63

Earlier quoted context omitted.

What does any of that have to do with electronically sending and receiving money? gstatic is correct with this: >If I want to send my grandma cash, why do 2 banks have to be sitting in the middle? The US government should be offering electronic money accounts to everyone as a utility, and they should be constitutionally guaranteed (even to felons), with no ability to lose them. Anyone should be able to send and recei…

Instead what will happen is they will gamify your deposits (see what the WEF says about CBDCs) or freeze them because you hit some AML rules and you will have no recourse

Hence the need to amend the constitution.
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