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I was listening to a podcast a few weeks ago (Planet Money) and was genuinlely shocked at how poor the US payments network is in relation to here in the UK. Mo

I was listening to a podcast a few weeks ago (Planet Money) and was genuinlely shocked at how poor the US payments network is in relation to here in the UK. Most bank transactions here complete within 2 hours (faster payments service) and are completely free.

Qworg 8y ago
The US Federal Reserve is currently trying to work towards faster payments - and seems to want to let private industry solve the problem. It really is terrible though and has been for a long time.
- ericd 8y ago
  The problem with that from what I've heard is that private industry really loves the float on that 3+ day transfer window.
- PeterisP 8y ago
  Historically, in EU the private industry chose not to solve the problem because (just like in USA) the problem is profitable for them. Sometimes people need fast payments and you can charge them lots of money for that; if everyone's basic payments are fast and cheap, then you lose that revenue. The point of change in EU was legally mandated changes (PSD) which (after a transition period, something like 2 years maybe?) essentially required banks to deliver payments within a certain time or compensate the payer for any losses/costs caused by the delay, at which point suddenly the private industry managed to quickly solve all the technical and organizational problems that were impossible before.
  - pfranz 8y ago
    I think it's a bit odd we rely on governments to print and issue currency (estimates that only 8% of currency is physical), yet are very hands off about the digital side of things.
- pfranz 8y ago
  I think a few years ago there was a summit of US bankers to talk about creating a faster alternative to ACH. They decided not to (presumably because they didn't see any benefit to themselves). I do keep hearing about "Same Day ACH" which was rolled out and phases and phase 3 was supposed to be done on March 16, 2018. https://www.nacha.org/rules/same-day-ach-moving-payments-faster-phase-1 https://www.nacha.org/rules/same-day-ach-moving-payments-fas...
- jrochkind1 8y ago
  Isn't "letting private industry solve the problem" exactly what we've already got?
jwr 8y ago
I could not believe my eyes when I saw that a transfer (it's called a "wire transfer") will cost me $35 on the sending side, and the receiver will pay another $25. Then you need the bizarre routing numbers which banks bizarrely obfuscate for even more bizarre reasons and which are easy to get wrong because there is no checksum. And then it takes days. No wonder when anything even slightly better appears, people jump on it. For comparison, a SEPA transfer in the EU costs around 1 EUR, gets done within a single business day, and account numbers have checksums, so you can't easily make a mistake.
- zAy0LfpBZLC8mAC 8y ago
  > For comparison, a SEPA transfer in the EU costs around 1 EUR That's ... expensive? In .de it's usually free for consumers with online banks, around 10 ct for business accounts ...
  - jwr 8y ago
    Even if they are cross-border? In Poland the in-country ones are free/cheap, and anywhere else in the EU is around 1 EUR.
    - zAy0LfpBZLC8mAC 8y ago
      Yes, actually it's illegal to differentiate the price based on destination country, a SEPA transfer is a SEPA transfer. But as .de uses the euro as its currency, all in-country transfers are SEPA transfer, which I suppose isn't the case for Złoty transfers within Poland, thus allowing for differentiated prices?
- digikata 8y ago
  A wire transfer is a little different than an ACH. Some transactions seem to require wire transfer, not sure if that's just momentum or there is some other driving reason for the choice. https://www.thebalance.com/ach-vs-wire-transfer-3886077 https://www.thebalance.com/ach-vs-wire-transfer-3886077
getcrunk 8y ago
You should check out our credit card processing fees
pfranz 8y ago
I'm pretty sure a bunch of years ago Planet Money had a podcast where they just marveled at someone in the UK sending their daughter in NYC enough to buy a pint in realtime. I think they've reported on ACH a few times each year and there never seems to be any incentive (from the group maintaining ACH) to improve it. What's worse is that it not only takes a few days, I often don't see it show up until a few days after that (back dated to when it was supposed to be received!).
- anitil 8y ago
  At the risk of repeating myself, it's in the epilogue of the same episode as OP: https://news.ycombinator.com/item?id=19579575 https://news.ycombinator.com/item?id=19579575
  - pfranz 8y ago
    Thanks! Yeah, six years ago and it's still amazing compared to the bleeding edge of ACH (Same Day ACH, where transfers are processed twice a day).
xtracto 8y ago
About 3 years ago I was raising money in the USA for a Mexican FinTech startup. Said startup uses Mexico's equivalent of ACH to transfer money (it is called SPEI). VCs in the US were amazed when we told them that SPEI transfers costed $.4 USD and the money was moved in 15 minutes or less. Fast forward years later I work in a company that uses ACH, I have came to know some of its internals, and man how bad it is... taking up to 5 days to clear a transaction, and never really giving you an ACK signal (but you have to wait and pray not to get a NACK). Sometimes the USA surprises me the bad way.
- cal5k 8y ago
  Canada is like this as well.
  - inspector-g 8y ago
    Like Mexico, or like the US? (Your comment is ambiguous; genuinely curious)
    - NullPrefix 8y ago
      yes
    - Spoom 8y ago
      In some ways Canada is like the US (e.g. use of checks) but in others they are like Mexico / Europe (Interac, i.e. PIN-based payments, email money transfers).
anitil 8y ago
I believe it's this one [0]. The context is that Planet Money raised a bunch of money to manufacture (sort-of from scratch) T-shirts, and needed to wire some money. Very worth a listen. [0] : https://www.npr.org/sections/money/2013/10/04/229224964/episode-489-the-invisible-plumbing-of-our-economy https://www.npr.org/sections/money/2013/10/04/229224964/epis...

Qworg 8y ago

The US Federal Reserve is currently trying to work towards faster payments - and seems to want to let private industry solve the problem. It really is terrible though and has been for a long time.

ericd 8y ago
The problem with that from what I've heard is that private industry really loves the float on that 3+ day transfer window.
PeterisP 8y ago
Historically, in EU the private industry chose not to solve the problem because (just like in USA) the problem is profitable for them. Sometimes people need fast payments and you can charge them lots of money for that; if everyone's basic payments are fast and cheap, then you lose that revenue. The point of change in EU was legally mandated changes (PSD) which (after a transition period, something like 2 years maybe?) essentially required banks to deliver payments within a certain time or compensate the payer for any losses/costs caused by the delay, at which point suddenly the private industry managed to quickly solve all the technical and organizational problems that were impossible before.
- pfranz 8y ago
  I think it's a bit odd we rely on governments to print and issue currency (estimates that only 8% of currency is physical), yet are very hands off about the digital side of things.
pfranz 8y ago
I think a few years ago there was a summit of US bankers to talk about creating a faster alternative to ACH. They decided not to (presumably because they didn't see any benefit to themselves). I do keep hearing about "Same Day ACH" which was rolled out and phases and phase 3 was supposed to be done on March 16, 2018. https://www.nacha.org/rules/same-day-ach-moving-payments-faster-phase-1 https://www.nacha.org/rules/same-day-ach-moving-payments-fas...
jrochkind1 8y ago
Isn't "letting private industry solve the problem" exactly what we've already got?

jwr 8y ago

I could not believe my eyes when I saw that a transfer (it's called a "wire transfer") will cost me $35 on the sending side, and the receiver will pay another $25. Then you need the bizarre routing numbers which banks bizarrely obfuscate for even more bizarre reasons and which are easy to get wrong because there is no checksum. And then it takes days. No wonder when anything even slightly better appears, people jump on it. For comparison, a SEPA transfer in the EU costs around 1 EUR, gets done within a single business day, and account numbers have checksums, so you can't easily make a mistake.

zAy0LfpBZLC8mAC 8y ago
> For comparison, a SEPA transfer in the EU costs around 1 EUR That's ... expensive? In .de it's usually free for consumers with online banks, around 10 ct for business accounts ...
- jwr 8y ago
  Even if they are cross-border? In Poland the in-country ones are free/cheap, and anywhere else in the EU is around 1 EUR.
  - zAy0LfpBZLC8mAC 8y ago
    Yes, actually it's illegal to differentiate the price based on destination country, a SEPA transfer is a SEPA transfer. But as .de uses the euro as its currency, all in-country transfers are SEPA transfer, which I suppose isn't the case for Złoty transfers within Poland, thus allowing for differentiated prices?
digikata 8y ago
A wire transfer is a little different than an ACH. Some transactions seem to require wire transfer, not sure if that's just momentum or there is some other driving reason for the choice. https://www.thebalance.com/ach-vs-wire-transfer-3886077 https://www.thebalance.com/ach-vs-wire-transfer-3886077

getcrunk 8y ago

You should check out our credit card processing fees

pfranz 8y ago

I'm pretty sure a bunch of years ago Planet Money had a podcast where they just marveled at someone in the UK sending their daughter in NYC enough to buy a pint in realtime. I think they've reported on ACH a few times each year and there never seems to be any incentive (from the group maintaining ACH) to improve it. What's worse is that it not only takes a few days, I often don't see it show up until a few days after that (back dated to when it was supposed to be received!).

anitil 8y ago
At the risk of repeating myself, it's in the epilogue of the same episode as OP: https://news.ycombinator.com/item?id=19579575 https://news.ycombinator.com/item?id=19579575
- pfranz 8y ago
  Thanks! Yeah, six years ago and it's still amazing compared to the bleeding edge of ACH (Same Day ACH, where transfers are processed twice a day).

xtracto 8y ago

About 3 years ago I was raising money in the USA for a Mexican FinTech startup. Said startup uses Mexico's equivalent of ACH to transfer money (it is called SPEI). VCs in the US were amazed when we told them that SPEI transfers costed $.4 USD and the money was moved in 15 minutes or less. Fast forward years later I work in a company that uses ACH, I have came to know some of its internals, and man how bad it is... taking up to 5 days to clear a transaction, and never really giving you an ACK signal (but you have to wait and pray not to get a NACK). Sometimes the USA surprises me the bad way.

cal5k 8y ago
Canada is like this as well.
- inspector-g 8y ago
  Like Mexico, or like the US? (Your comment is ambiguous; genuinely curious)
  - NullPrefix 8y ago
    yes
  - Spoom 8y ago
    In some ways Canada is like the US (e.g. use of checks) but in others they are like Mexico / Europe (Interac, i.e. PIN-based payments, email money transfers).

anitil 8y ago

I believe it's this one [0]. The context is that Planet Money raised a bunch of money to manufacture (sort-of from scratch) T-shirts, and needed to wire some money. Very worth a listen. [0] : https://www.npr.org/sections/money/2013/10/04/229224964/episode-489-the-invisible-plumbing-of-our-economy https://www.npr.org/sections/money/2013/10/04/229224964/epis...