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Is there going to be a universal SDK / API we can use with this? This would cut alot of middle companies out of the payments industry (or at least put pressure
by no_wizard 3y ago
Is there going to be a universal SDK / API we can use with this? This would cut alot of middle companies out of the payments industry (or at least put pressure on lowering fees). That would be a huge win.
Wish we could do the same for the credit card companies. Would be great if the Federal Government could intervene in some way to have Visa / Mastercard / American Express / Discover use the same API interface for payments. Would dramatically increase competition for providers.
- JumpCrisscross 3y ago> Is there going to be a universal SDK / API we can use with this? There is probably a neobank opportunity in providing this. FedNow is, reasonably, administered by banks. (The Fed doesn't want to provide end-user customer service nor incur liability for fraud.)
- no_wizard 3y agoRight. I suppose that makes sense. I’m thinking about ease of startup costs for institutions that want to use it financially. The Fed would need to support that anyway. Perhaps by not limiting a qualifying institution to just banks but also opening up access to financial service firms would be enough. They could just have some sort of fair priced qualifying program that a company has to maintain to access it or something
- imtringued 3y agoIsn't this column's whole shtick?
- ericjmorey 3y agoThe Fed is not allowed to compete with member banks. That's part of the reason why something like FedNow took so long to emerge.
- incahoots 3y agoI think you know the answer to your question, more than likely this won’t see the light of day outside of federal usage. Far too much lobbying for any REAL competition to shake up the industry. This will be exclusive to the federal government and state governments I imagine.
- deleted 3y ago[deleted]
- uses 3y agoCurrently this works between banks only. Banks have reserves at the Fed, and those reserves are what gets adjusted when a FedNow transaction happens. The banks then adjust their own records on their customers' behalf.
- gumby 3y agoThe fed lists a number of service providers on their page. I assume they will now roll out some interfaces. Glad to see the US banking system start to catch up with the rest of the world ca mid 90s.
- foobarian 3y agoSo it's like a Bitcoin exchange, but with dollars!
- deleted 3y ago[deleted]
- tarmon 3y agoI don't see how this is anything like a crypto exchange, is there something I'm missing here?
- RC_ITR 3y agoSome crypto maximalists ignore many of the intrinsic aspects of crypto (decentralized consensus, cryptography, etc.) because in their use case, it's just 'digital money.' So when a completely dissimilar example of 'digital money' comes up, they equate it to crypto, even though it lacks many of the intrinsic aspects of crypto.
- rowls66 3y agoShameless plug, but Moov offers a single API for payments. The clearing house's RTP system will be supported shortly, and FedNow is coming soon after. Check out out here: https://moov.io/ https://moov.io/
- tracker1 3y agoPricing page is all but worthless... no indication what so ever about what even basic tier pricing is, or could be.
- rabidonrails 3y agoAgreed. This is really strange from their pricing page: >> Get started for free to test our APIs & unblock your development team. Talk to us about your transaction volume to get the best pricing with flexibility to grow. You would think there would _at least_ be a ceiling price. Makes me wonder why they can't show _any_ pricing.
- _jal 3y agoYeah, that's a good one. "Spend the time and energy to build us into your product first and then we can talk price" is not the most reassuring of pitches.
- Qworg 3y agoNot to answer for Moov, but IIRC, they're still open source + a paid option with banking partners. I think the pricing is weird because you can start (and run!) for free, while the end to end solution requires negotiating with multiple parties.
- mattbrewsbytes 3y ago> cut alot of middle companies out of the payments industry Those middle companies have lobbyist representation and the govt has no intention of cutting any companies out of the payments industry.
- tiffanyh 3y ago> Wish we could do the same for the credit card companies. For e-commerce, isn’t that SRC? https://www.emvco.com/emv-technologies/secure-remote-commerce/ https://www.emvco.com/emv-technologies/secure-remote-commerc...
- finfrastrcuture 3y agothat seems like the right answer... however, the payment itself is almost besides the point. the tricky part is the scheme / governance surrounding payments. who is liable for what, preventing fraud, etc. these large payment actors + the middlemen are more about fostering trust networks than moving the actual dollars and cents. fraud in P2P payment networks (e.g. Zelle) is already a huge issue because a lack of a governing actor like a card network.[0] a different question is would the government ever provide this mediating role / lay out guidelines? would we want it to? https://www.nytimes.com/2022/03/06/business/payments-fraud-zelle-banks.html https://www.nytimes.com/2022/03/06/business/payments-fraud-z...
- figassis 3y agoThis is usually never the way it happens. The government does not make market ending decisions on a whim. It would have already met with the biggest stakeholders and fedNow is likely the result of many considerations and compromises. Visa will likely not be threatened any time soon.
- cubefox 3y agoYeah. Unlike UPI in India, FedNow is not mandatory for anyone. But companies could still offer "discounts" to customers when they use FedNow, as they save on credit card fees.
- Onewildgamer 3y agoUPI is not mandatory in India, don't know where and why such a message circulates. If I am benefitting with Credit Cards at petrol pumps, I deliberately use it and there's no concern from anybody. Merchants prefer UPI (for now) because money goes to their bank account without any cost. And cash still works at most places where UPI does.
- instagraham 3y agoCompanies with large turnovers (above Rs 50 crore - 6$ million) are mandated to have a route to accept digital payments https://incometaxindia.gov.in/communications/circular/circular_no_12_2020.pdf https://incometaxindia.gov.in/communications/circular/circul... Besides this, stakeholders/partners of the NPCI are mandated to offer UPI services. I'm not sure if signing up was optional, but it would honestly be suicidal for a bank not to, given that there are so many competitors offering the same.
- Onewildgamer 3y agoI can see why that's the case for high turnover companies. It is to track and reduce money laundering and tax evasion. Also, it has become a no brainer for any consumer facing company to not provide UPI as an option. I keep appreciating the regulations in India, it is overall supportive of the common man. From say SEBI regulations on derivative markets to digital payments. For eg. credit cards are becoming less frequent, people here won't take out their cards for every other expense. People have become aware of the fact that money at the end is in bank and spending from the bank account hits much more real than a 30 day stream of cash 3-4 times your salary handed to you whenever you need. And so, low income and middle income groups spend wisely and don't get caught in spend cycles above their capacity. Such an angle goes unappreciated, but hopefully this continues and money still be real and in our pocket.
- colechristensen 3y agoNo. This is an interface for banks to settle between themselves. A bank does not want to interact with you in the same channel as it interacts with another bank. What there will be are services provided by banks which utilize this for instant transfers. The middle companies between transfers you want. Most of the actual work is fraud prevention and dispute resolution... unless you want the only means of settling a dispute is through the courts.
- mavili 3y ago> This would cut alot of middle companies out of the payments industry Not really. All it will do is let the same companies change the way they handle average citizens' payments. It's the same as Open Banking in Europe. It is supposed allow small businesses to leverage this to enable innovation and all that stuff, but when you want to use these APIs you find there are limitations on who can actually use it. For example, you can only put your service to production by being on a "directory" of approved providers, and to be on that directory you need something 25k or 50k in an account. So, not really that useful for a small startup wanting to make a product out of it. Banking systems are the backbone of world power dominance, big players won't let small people share it.
- adventured 3y agoIt's not particularly difficult for a small start-up to come up with $25,000 in the US. That's modest angel investor money in a small city.
- yieldcrv 3y agoAside from playing devil’s advocate, do you have a sensible reason why it should be this way versus another way?
- kelnos 3y agoI would assume such a system is capable of facilitating fraud, so it's probably good to have some kind of financial hurdle you have to jump in order to use it? Not that having $25k or $50k is a guarantee that you aren't a fraudster, but I imagine there are a lot of would-be fraudsters who don't have that kind of cash on hand. I do think this is a bit of a weak justification, though.
- twosdai 3y agoFunny enough this appears at face value to be the same idea behind proof of stake concensus protcals.... lololol
- _praf 3y agoColumn is building API's for our direct integration with FedNow: https://column.com/fednow/ https://column.com/fednow/ The network of banks supporting FedNow is still small, so we may not see meaningful payment volume for a while compared to ACH, Wires, Checks, etc.
- toomuchtodo 3y agoThat you for staying true to your word! https://news.ycombinator.com/item?id=31114620 https://news.ycombinator.com/item?id=31114620
- Qworg 3y agoEven when offered a more competitive option, consumers love credit cards - the merchant gets soaked, while they get cash back. Given how the networks are, you'd have to have an unprecedented collusion of merchants to break the credit networks open.
- patmorgan23 3y agoCredit cards also have really good consumer protection laws around them. I have 30 days to report any fraudulent transactions and on my card and the bank MUST give me my money back.
- scarface_74 3y agoEvery single study shows that people spend more when using credit cards than when using cash.
- pbmonster 3y ago> consumers love credit cards - the merchant gets soaked, while they get cash back It's never the merchant that gets hosed. It's the people not using credit cards. Because, of course, the merchant just takes his banking expenses and forwards them right back to all customers by increasing prices across the board. And it's not only the people not using credit cards that get hosed. Even the people with credit cards lose out - because the cash back is practically always smaller than the fee the merchant payed and forwarded to the customer. As always, the real winner is only the bank. There's a reason for the market cap of MasterCard and Visa...
- TheBengaluruGuy 3y ago> Wish we could do the same for the credit card companies. Would be great if the Federal Government could intervene in some way to have Visa / Mastercard / American Express / Discover use the same API interface for payments. Would dramatically increase competition for providers. If FedNow can fit in with ApplePay, then it can displace credit cards in the first place! The corollary I’m drawing, is from India where “UPI” payments (something similar to FedNow) was launched about 7 years ago and today is the more dominant payment mode than credit cards.
- cubefox 3y ago> Wish we could do the same for the credit card companies. FedNow can replace credit cards for cases where chargeback or actual credit isn't necessary. So for many ordinary cashless payments. Arguably even for many cases (small to medium amounts of money) where the possibility of chargeback seems useful FedNow could be better in expectation, because the fees are lower. The credit card companies are making money after all. Using them for chargeback is like buying insurance for things you can replace out of pocket: On average, you make a loss.
- nailer 3y ago> This would cut alot of middle companies out of the payments industry (or at least put pressure on lowering fees). That would be a huge win. > Wish we could do the same for the credit card companies. I have no idea about fednow but you can directly transfer an unlimited amount of USDC to someone in about a second for $0.0025 right now on Solana.
- nailer 3y ago$0.000025, ahem.