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FedNow is launching soon. It won't support chargebacks or reversals, which merchants would love, so they may offer it as a payment method (if this is possible).
by 55555 3y ago
FedNow is launching soon. It won't support chargebacks or reversals, which merchants would love, so they may offer it as a payment method (if this is possible). Consumers will then be able to save a few % at the expense losing their ability to contest the transaction. Unless credit card agreements mandate the price be the same regardless of payment method, or something.
- bombcar 3y agoI suspect fednow is why visa and MC are moving now to reduce fees. I can’t wait.
- arcticbull 3y agoIt almost certainly isn't. Nobody's taking FedNow at point of sale.
- bombcar 3y agoNobody is doing anything with FedNow yet because it's not out. But if it works it will grow, just like in the EU where they have similar things and they're used.
- arcticbull 3y agoWhen I said "nobody is taking FedNow" I meant nobody is going to be taking FedNow at the point of sale after launch in July. It'll work just fine, but it enables things like Cash App, Zelle and Venmo to avoid using debit rails. It's quite unlikely it'll actually exist at cash registers. Out of curiosity which product are you referring to in the EU? To my knowledge they just use Visa/MC Debit or local debit schemes at point of sale.
- bombcar 3y agoLots of larger purchases use the equivalent of what would be in the USA a routing number and a bank account number.
- arcticbull 3y agoAt which retail point of sale?
- nailer 3y agoI suspect it’s fast cryptocurrency networks. There’s L1s where you can pay on your phone and the transaction goes through in a second and a whole bunch of payment startups.
- herbst 3y agoWith 3d secure and SMS verification I would argue that any standard crypto payment is faster than credit card as has been for a while. At least online.
- adrr 3y agoMost debit cards cost the merchant 0.05% for interchange and provide consumers with fraud protection.
- herbst 3y agoThat sounds great. We all know how secure credit cards are and that nobody ever gets fraudulent charges.
- netheril96 3y agoIn China most payments cannot be reversed. By contrast, the security of payment methods are much more stringent in China. I was surprised when I first learnt that you could spend money online with a VISA card by only card number, expiration date and a 3(!) digit CVV. Those are hardly secure and printed out on the card that anyone can see. Then the US merchants have so many rules about fraud detection but all of them are just heuristics with many false positives and false negatives. When Internet companies constantly invents new methods to both increase security and usability (two step authentication, pass keys, FIDO-U2F), the payment industry in the US is just stuck in the past.
- Symbiote 3y agoMany of the large American companies involved in payments (Visa, MasterCard, Stripe, Square, PayPal) also operate in Europe, and implement the modern security practices required here. 2FA for credit/debit payments made online, for example, and chip payments since... 2004 or something.
- rhaway84773 3y agoAmerican payment systems are shockingly outdated and have been so for decades.
- mercutio2 3y agoJust because things are different doesn’t mean they’re “outdated”. The optimal amount of fraud is not zero. Merchants, and consumers, both benefit from the equilibrium where there is much more commerce, backstopped by bank fraud detection. Credit card fraud is just not a large problem in the US, and the extra commerce encouraged by continuing to use a relatively insecure system generally outweighs the benefits of tightening security. Tokenized NFC payments are even more convenient than swiping credit cards, and they’re gradually replacing the old system, but there is no urgency here.
- petre 3y agoStripe and Paypal are annoying. They refuse payments with virtual debit cards, debit cards issued in other jurisdiction than your shipping (or IP?) address, etc. I'm usually put off when I see a Stripe or Paypal checkout screen.
- mindslight 3y agoThe entire US banking system is built around debits, delayed settlement, and reversible transactions (as contrasted with bearer tokens, like cash). If a digital payment method doesn't support chargebacks/reversals, then it's not going to be exposed to consumers in its raw form. Rather it will have conventions layered on top of it that do support these things - like your bank contacting the receiving bank and saying "this transaction was unauthorized, please send the money back". I haven't read too much on FedNow, but I would expect this will take the form where accounts that can receive payments assent to their bank reversing transactions for various reasons (and then using another non-reversible FedNow transaction to send the money back). So at the consumer level, chargebacks will still exist (for better and for worse).