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Paypal has my banking details and can use those or credit/debit card to complete my payments. They always prefer to use bank because of no fees with cc/debit as

Paypal has my banking details and can use those or credit/debit card to complete my payments. They always prefer to use bank because of no fees with cc/debit as backup. Google could do the same. ACH is really creaky and old. We need something like UPI (india) or Wechat (china) in the US. Zelle is a poor substitute.

deleted 6y ago
[deleted]
vageli 6y ago
> Paypal has my banking details and can use those or credit/debit card to complete my payments. They always prefer to use bank because of no fees with cc/debit as backup. Google could do the same. ACH is really creaky and old. > We need something like UPI (india) or Wechat (china) in the US. Zelle is a poor substitute. Why is zelle a poor substitute? I can pay people via phone number.
- kevin_thibedeau 6y ago
  Zelle still uses ACH under the covers.
  - throwaheyy 6y ago
    Zelle is real-time, while ACH is not.
    - toomuchtodo 6y ago
      Zelle is owned by a private company, owned by the US' largest banks [1]. The US Federal Reserve is working on a replacement [2] (FedNow) that presumably will have less power to keep banking entities (small banks, community banks) in the US with less pull off the network (with pricing or other mechanisms). From the perspective that instant payments should be an inexpensive, accessible utility for the benefit of all citizens, the Fed's FedNow efforts are preferable to Zelle or legacy ACH services. [1] https://en.wikipedia.org/wiki/Zelle_(payment_service) https://en.wikipedia.org/wiki/Zelle_(payment_service) [2] https://corpgov.law.harvard.edu/2020/08/31/fednow-the-federal-reserves-planned-instant-payments-service/ https://corpgov.law.harvard.edu/2020/08/31/fednow-the-federa...
    - haltingproblem 6y ago
      I understand how Zelle pull off real-time for intrabank. For interbank, they are either covering it or have they built a payment service under the covers?
    - kevin_thibedeau 6y ago
      The final real reconciliation for Zelle is done over ACH.
cactus2093 6y ago
Paypal is basically acting as a short-term lender in this case, which comes with all its own risks and costs. Sure Google could do the same but it's not worth it to them to get into this mess. Paypal uses ACH under the hood (it's one of only two options, the other being wire transfers which are expensive and often even need to have humans in the loop). So they guarantee the payment to the seller, and then as the buyer your bank account gets charged up to a day later when the ACH batch processing goes through. If you don't have enough money in your bank when that happens, it gets rejected and Paypal takes on that loss unless they can recover it from you via collections system. To limit their risk, Paypal even uses Plaid in some cases to check your bank account balance before deciding whether to allow your payment to go through! But even that isn't a guarantee, because you could always have made multiple ACH payments that day of which some might go through and some could fail due to lack of funds. It's like trying to prevent a race condition in a multithreaded program by just checking the value again closer to where the race occurs, it might make the issue happen a little bit less often but to actually solve the problem you need certain atomic primitives which the US bank transfer system completely lacks.

deleted 6y ago

[deleted]

vageli 6y ago

> Paypal has my banking details and can use those or credit/debit card to complete my payments. They always prefer to use bank because of no fees with cc/debit as backup. Google could do the same. ACH is really creaky and old. > We need something like UPI (india) or Wechat (china) in the US. Zelle is a poor substitute. Why is zelle a poor substitute? I can pay people via phone number.

kevin_thibedeau 6y ago
Zelle still uses ACH under the covers.
- throwaheyy 6y ago
  Zelle is real-time, while ACH is not.
  - toomuchtodo 6y ago
    Zelle is owned by a private company, owned by the US' largest banks [1]. The US Federal Reserve is working on a replacement [2] (FedNow) that presumably will have less power to keep banking entities (small banks, community banks) in the US with less pull off the network (with pricing or other mechanisms). From the perspective that instant payments should be an inexpensive, accessible utility for the benefit of all citizens, the Fed's FedNow efforts are preferable to Zelle or legacy ACH services. [1] https://en.wikipedia.org/wiki/Zelle_(payment_service) https://en.wikipedia.org/wiki/Zelle_(payment_service) [2] https://corpgov.law.harvard.edu/2020/08/31/fednow-the-federal-reserves-planned-instant-payments-service/ https://corpgov.law.harvard.edu/2020/08/31/fednow-the-federa...
  - haltingproblem 6y ago
    I understand how Zelle pull off real-time for intrabank. For interbank, they are either covering it or have they built a payment service under the covers?
  - kevin_thibedeau 6y ago
    The final real reconciliation for Zelle is done over ACH.

cactus2093 6y ago

Paypal is basically acting as a short-term lender in this case, which comes with all its own risks and costs. Sure Google could do the same but it's not worth it to them to get into this mess. Paypal uses ACH under the hood (it's one of only two options, the other being wire transfers which are expensive and often even need to have humans in the loop). So they guarantee the payment to the seller, and then as the buyer your bank account gets charged up to a day later when the ACH batch processing goes through. If you don't have enough money in your bank when that happens, it gets rejected and Paypal takes on that loss unless they can recover it from you via collections system. To limit their risk, Paypal even uses Plaid in some cases to check your bank account balance before deciding whether to allow your payment to go through! But even that isn't a guarantee, because you could always have made multiple ACH payments that day of which some might go through and some could fail due to lack of funds. It's like trying to prevent a race condition in a multithreaded program by just checking the value again closer to where the race occurs, it might make the issue happen a little bit less often but to actually solve the problem you need certain atomic primitives which the US bank transfer system completely lacks.