I think the issue is that without regulations forcing banks to serve customers better, they will simply abandon all responsibility completely because it's cheap

I think the issue is that without regulations forcing banks to serve customers better, they will simply abandon all responsibility completely because it's cheaper for them. And since we see that with Zelle, banks will collude to all hose customers in the same way, the free market is not a solution. It would be trivial for banks to give customers better fraud protection tools and enable better recovery, but they clearly don't care. * For one, since you can't have a bank account anonymously the receiving bank knows exactly who stole the money. They should at least be able to refer them for criminal investigation. * Two, since they own the machinery of transferring the money, yes they can easily reverse fraudulent transactions -- the bank doesn't have to take a loss since the fraudster has to have an account with them. They know who to take it back from. * The fraudster withdrew the money and ran? ACH transfers have always taken up to 15 days to "clear" -- banks wouldn't let you withdraw money you just deposited exactly for this reason, to verify that the sending bank actually has the funds and there are no issues. Why can't Zelle let the sender specify a "hold" period so there is time to dispute the transfer and the funds can be recovered? Basically is seems to me that a modern digital payment systems must have a kind of escrow service built in. IMHO this is what we need the law to require banks to do. In combination there needs to be a payment dispute resolution system which would probably take the form of a kind of arbitration system not unlike the role small claims court plays. This is something the banks should lobby the government to provide since doing it themselves would clearly get complicated and expensive.