4 ms·

The most important questions to me are: 1. Are the transfers irreversible? Why? Because one big problem with our current system is the fraud (and mistrust)

The most important questions to me are: 1. Are the transfers irreversible? Why? Because one big problem with our current system is the fraud (and mistrust) that results from ACH/checks being sent under the impression they are guaranteed funds, but being reversed by the sender or because they didn't actually clear, days (up to weeks) later. This is a big source of scams. People are out lots of money because of this, and continuing every day that this doesn't get resolved. Not saying that we can protect everyone from everything, but this is a no-brainer. Are the transactions final (unless there is legal action and both parties are identified)? 2. Is it a "push" only system? Push, obviously meaning that only the account owner can initiate a transaction to transfer funds out of the account. I figure it must be, if things are instantaneous and irreversible (but that is to be confirmed). I don't want any more of our current system where someone knowing my bank account numbers can accidentally or purposefully withdraw money from my account and it's up to me to detect and ask for that to be fixed. This is ridiculous that we still have a system that allows that. ------ Of course, this new system means that people will need to be educated/trained on some of the dangers that may not be apparent when a system changes. Like, if someone gets duped into sending money, it is now irreversible. Or if fraud is committed somehow, there is no recovering from it. It probably (hopefully) will have to come with new types of account protection given these facts. Some problems will now be prevented, but new problems may be caused. An updated diligence on the part of users (and the system) will also be needed. I think it's a welcome and overdue development though.

connicpu 4y ago
It seems the idea here is that they are irreversible as settlement and clearing both happen instantaneously, and both the sender and recipient should have that information updated for them immediately. It didn't seem entirely clear, but it seems like request-for-payment is a supported feature, and that they will charge 1 cent per RfP transaction. The wording as a "request" makes it sound like the one paying will still have to approve the transaction on their side for it to go through
- abrylov 4y ago
  Actually yes, FedNow will only support one way transfers (push credits), when the owner of the account can initiate a transfer. Request for Payments supposed to support this as well, when merchant can send you a request to pay for something, but the account owner is the one who authorizes the transfer (ad oppose to direct debits in the ach world).
baskethead 4y ago
Fraud isn't one big problem, it's the biggest problem. Fraud is rampant. And no ability to reverse transactions means that fraud will keep going until no one trusts the technology at all and we are back to square one. Without trust, it just won't work and that's where the credit card companies did it right by guaranteeing against fraud. Of course, they did this off the backs of the merchants instead of putting their own money at risk but that's a different discussion.
- astrange 4y ago
  You can always reverse a transaction as long as you know where it went - call up the other bank in some secure way and ask them to send it back. Whether or not they listen to you isn't necessarily a technical question. https://bam.kalzumeus.com/archive/no-payments-are-final/ https://bam.kalzumeus.com/archive/no-payments-are-final/
  - zxcvbn4038 4y ago
    Really? You have tried calling a bank with whom you have no direct relationship with and asked them to reverse a charge? “Hi I’m Bob and I want you to send me back the $50 I sent Chuck?” Banks are pretty stupid and most of their security is performance art at best, but their response is going to be “Work it out with Chuck.”
    - astrange 4y ago
      Read "you" as "originating bank" and "call up" as "send SWIFT message".
      - bx00000013 4y ago
        Aren't they talking about ACH? I didn't think US banks use SWIFT for domestic transactions.
        astrange 4y ago

connicpu 4y ago

It seems the idea here is that they are irreversible as settlement and clearing both happen instantaneously, and both the sender and recipient should have that information updated for them immediately. It didn't seem entirely clear, but it seems like request-for-payment is a supported feature, and that they will charge 1 cent per RfP transaction. The wording as a "request" makes it sound like the one paying will still have to approve the transaction on their side for it to go through

abrylov 4y ago
Actually yes, FedNow will only support one way transfers (push credits), when the owner of the account can initiate a transfer. Request for Payments supposed to support this as well, when merchant can send you a request to pay for something, but the account owner is the one who authorizes the transfer (ad oppose to direct debits in the ach world).

baskethead 4y ago

Fraud isn't one big problem, it's the biggest problem. Fraud is rampant. And no ability to reverse transactions means that fraud will keep going until no one trusts the technology at all and we are back to square one. Without trust, it just won't work and that's where the credit card companies did it right by guaranteeing against fraud. Of course, they did this off the backs of the merchants instead of putting their own money at risk but that's a different discussion.

astrange 4y ago
You can always reverse a transaction as long as you know where it went - call up the other bank in some secure way and ask them to send it back. Whether or not they listen to you isn't necessarily a technical question. https://bam.kalzumeus.com/archive/no-payments-are-final/ https://bam.kalzumeus.com/archive/no-payments-are-final/
- zxcvbn4038 4y ago
  Really? You have tried calling a bank with whom you have no direct relationship with and asked them to reverse a charge? “Hi I’m Bob and I want you to send me back the $50 I sent Chuck?” Banks are pretty stupid and most of their security is performance art at best, but their response is going to be “Work it out with Chuck.”
  - astrange 4y ago
    Read "you" as "originating bank" and "call up" as "send SWIFT message".
    - bx00000013 4y ago
      Aren't they talking about ACH? I didn't think US banks use SWIFT for domestic transactions.
      - astrange 4y ago