I think FedNow can serve as the inter-bank settlement rails for CBDC, or the wholesale side of CBDC
FedNow Is Live
811–820 of 1001 posts
Re: FedNow Is Live
#812Seems, it started with Google advising the Fed. https://en.wikipedia.org/wiki/Unified_Payments_Interface In December 2019, noting the success of UPI, Google suggested the US Federal Reserve Board to follow UPI as example in developing FedNow,[22] a real-time payment system for United States.[23]
UPI is a modern marvel tbh. Can't praise it enough.
Re: FedNow Is Live
#813Earlier quoted context omitted.
What is it about CBDCs you find concerning compared to cash?
It's bad enough that banks have virtually unlimited insight into my spending habits that we need to give the Feds the same access. I should have the right to buy a big mac without some government server getting pinged.
That’s what cash is for. You never had any privacy for electronic transactions, might as well nip the idea in the bud.
Re: FedNow Is Live
#814Earlier quoted context omitted.
If the government wants to tax these transactions - and let's admit it, they do - they'll take it right off the top. Unlike with the banking system where different banks have different prices for wires - or even free under certain conditions - you can't "shop around" for a new government. Further, if a government determines you are not an "acceptable" participant, they have the ability to stop transactions to/from yo…
> If the government wants to tax these transactions - and let's admit it, they do - they'll take it right off the top. If the federal government wants to tax things they indeed can. But I was asking about a chance from the status quo. If you owe the US government money right now they can take it out of your bank account. > Unlike with the banking system where different banks have different prices for wires - or even…
> But I was asking about a chance from the status quo.
> If you owe the US government money right now they can take it out of your bank account.
Yes, but they can't see your transactions unless they go ask your bank. Now, they could do that, but they're not set up to do this for all transactions. FedNow changes that for all transactions within FedNow. The government wouldn't start taxing transactions until FedNow is the only game in town or all other payment systems also give them that kind of visibility.
As well, with FedNow they get real-time transaction visibility, which is very different from getting non-real-time batched transaction data from banks.
> Yes but your legal remedies might actually be better under FedWire. US fourth amendment law has a massive loophole whereby if a private business "voluntarily" assists the government it doesn't count as a search. So if the government searches your government bank account you'll have potentially better remedies than if they ask your private bank to pretty please send a printout. (and there's very little chance your current bank tells the feds to shove off and come back with a warrant in that kind of situation)
This is a very good point.
Re: FedNow Is Live
#815Earlier quoted context omitted.
Yes, that is absolutely a use case. Similar to Venmo, there is also a Request for Payment (RFP) mechanism. I'm on the Request for Payment (RFP) Work Group that is composed of a number of financial institutions, service providers, and billers. Netflix is part of the RFP Work Group. So presumably they are interested in offering consumers the ability to pay for Netflix using FedNow instead of a credit card. Instead of N…
> So presumably they are interested in offering consumers the ability to pay for Netflix using FedNow instead of a credit card. I do wonder how stuff like this will shake out. I will use a credit card, always, with any vendor that doesn't pass along credit card fees to the customer in some way. (Why would I choose otherwise? The credit card gives me rewards, and better fraud protection.) But more and more, I see comp…
"any vendor that doesn't pass along credit card fees to the customer in some way"
I think every vendor passes along the fees, either in aggregate through pricing, or to the individual as a charge. At least in the latter case it is more transparant and fair to non cc users.
Re: FedNow Is Live
#816Earlier quoted context omitted.
Will this replace ACH and/or Plaid for sending money amongst my own various accounts, as well, or is it intended more as a 'payment' than a tranfer?
Plaid still uses ACH just like it has always been used for years. It is just an easier way to connect and link accounts and data alongside it.
The question I guess still stands WRT...if FedNow is so easy/great/instant, is there even still a business model for Plaid?
Re: FedNow Is Live
#817I don't understand why FedNow and CBDC are such a big issue in the US. FedNow looks quite attractive from a fees perspective, especially when compared to PayPal and alike. Part of me wonders if the middlemen who stand to lose out might be trying to muddy the waters. It wouldn't be the first time.
> I don't understand why ~FedNow and CBDC~ BIG BROTHER are such a big issue in the US. Fixed this for you. I don't really want a gigantic federal agency having insight into every financial transaction I make. Hard, fucking, pass.
Seems to me people is failing to understand what CBDCs will bring, especially even more “bad money” and economic slavery caused by “incentives” to spend.
But the list goes on..
Re: FedNow Is Live
#818Earlier quoted context omitted.
I had to read this twice - is it really not like in the UK? Is this the first US implementation of "Faster Payments"? Sure people in the UK sometimes use PayPal, Revolut, but most of the time its always just a friend gives (and you save on your banking app) their bank account number and sort code, and you instantly send it across. edit: with no fee
I can think of 0 occasions where I’ve given anyone my bank account info who isn’t a commercial organization (employer, electric company, etc). I had no idea it was the opposite in the UK. Edit: with the exception of writing physical checks, of course. I use those when the receiver doesn’t accept Venmo or Apple Pay.
I remember my father had a checkbook in the 1970's. I never had one, not sure they even exist here anymore (Belgium).
For payments to friends we use bank apps. Usually the receiver generates a QR code for the payment on their phone, which you scan from your bank app, sign with a pincode, and the payment is executed immediately. If you are not near you can also use their account number to transfer money instantly.
Re: FedNow Is Live
#819I don't understand why FedNow and CBDC are such a big issue in the US. FedNow looks quite attractive from a fees perspective, especially when compared to PayPal and alike. Part of me wonders if the middlemen who stand to lose out might be trying to muddy the waters. It wouldn't be the first time.
> I don't understand why ~FedNow and CBDC~ BIG BROTHER are such a big issue in the US. Fixed this for you. I don't really want a gigantic federal agency having insight into every financial transaction I make. Hard, fucking, pass.
Please explain to me what FedNow changes compared to the current ACH system in regards to government recording of transactions? Please explain to me how FedNow prevents cash transactions from occurring, or otherwise justify your statement “every financial transaction I make”?
Re: FedNow Is Live
#820Earlier quoted context omitted.
This is usually never the way it happens. The government does not make market ending decisions on a whim. It would have already met with the biggest stakeholders and fedNow is likely the result of many considerations and compromises. Visa will likely not be threatened any time soon.
Yeah. Unlike UPI in India, FedNow is not mandatory for anyone. But companies could still offer "discounts" to customers when they use FedNow, as they save on credit card fees.
UPI is not mandatory in India, don't know where and why such a message circulates. If I am benefitting with Credit Cards at petrol pumps, I deliberately use it and there's no concern from anybody. Merchants prefer UPI (for now) because money goes to their bank account without any cost. And cash still works at most places where UPI does.