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Funny thing about topics like this is that people of any given country is oblivious to how other countries have solved that problem, or the challenges other cou

by 2143 3y ago

Funny thing about topics like this is that people of any given country is oblivious to how other countries have solved that problem, or the challenges other countries face, or inturn the problems that they themselves face. Regarding payment systems specifically, people generally don't realize what they're missing. Pick anybody from anywhere and they'll tell you they've been able to do everything they ever wanted to do (with regards to payments) using the already-existing systems of their country.

TechBro8615 3y ago
Sure, but in most countries, those services are provided by banks, not the government. There is certainly something to be said for legislation like open banking regulations that encourages/forces banks to facilitate instant peer to peer payments. But that's a far cry from a service offered directly from the government (okay, technically the fed isn't the government, but it may as well be).
- nordsieck 3y ago
  OK. But it doesn't seem to me like there's a huge difference between "Know Your Customer" + FDIC and Fed Now aside from removing risk to consumers that most people ignore anyhow.
  - TechBro8615 3y ago
    There's a big difference between checking passports before onboarding a customer, and sending every transaction to the federal government in real time.
    - chimeracoder 3y ago
      > There's a big difference between checking passports before onboarding a customer, and sending every transaction to the federal government in real time. I guess there's technically a difference between "sending every transaction to the federal government in real-time" (FedNow) and "sending every transaction to the federal government, in batches three times per day" (the status quo). But from a privacy standpoint, the two are functionally identical.
      - xp84 3y ago
        Can you clarify something? I thought FedNow was for settling up when I, as an ABC Credit Union customer, initiate a transfer of $5000 to you, a Chase customer. Now ABC needs to subtract it from my account, and if successful, tell the Fed to take money out of ABC's Fed account and put it into Chase's, and to tell Chase to expect $5000 (Transaction ID: XXXX?) and here's who it's for. Does FedNow, or whatever batch job it is replacing, involve ABC telling FedNow "This is for a transfer from Jane Doe (SSN 123-45-6789) to Joe Bloggs (SSN 098-76-5432)"? As I imagined it, FedNow would only need to know what bank is sending and what is receiving.
        patmorgan23 3y ago
        You should do some research on the Automated Clearing House (ACH) system. It's how most bank transfers are done. Most ACH transactions will likely move over to FedNow as it's implemented. I believe both systems do account to account transfer, fed now is just faster and settled instantly, while ACH takes a couple days to settle.
        chimeracoder 3y ago
        > Most ACH transactions will likely move over to FedNow as it's implemented... fed now is just faster and settled instantly, while ACH takes a couple days to settle. FedNow is more of an extension to ACH than a replacement for it. Same-day ACH also exists, although it's relatively new. FedNow is faster than same-day ACH though.
- 2143 3y ago
  This, ladies and gentlemen, illustrates the point I was trying to make.
- tiffanyh 3y ago
  Sounds like a European view.
- lxgr 3y ago
  Interbank payment systems are actually provided by central banks or the government (or affiliated organizations of either) in quite a few cases. Europe has TIPS (an ECB-operated implementation of the SEPA Instant Credit Transfer scheme), India has UPI (which is pretty close to the central bank, as far as I understand) etc. In the case of FedNow and TIPS, there are private alternatives as well, such as RTP in the US or EBA Clearing's SEPA Instant implementation in Europe. This is similar to ACH – there's both a public (FedACH) and a private (The Clearing House) implementation/network available.
- lampiaio 3y ago
  > in most countries, those services are provided by banks, not the government That's something I always point out when telling others how awesome the Brazilian Pix system https://en.wikipedia.org/wiki/Pix_(payment_system) https://en.wikipedia.org/wiki/Pix_(payment_system) is. It's not a private initiative by a bunch of individual banks, but rather a zero-fee payment system managed by the country's central bank: https://www.bcb.gov.br/en/financialstability/pixfaqen https://www.bcb.gov.br/en/financialstability/pixfaqen .
  - gtirloni 3y ago
    And it seriously rocks. It has been such a tremendous change to everyday life.
    - TechBro8615 3y ago
      What happens when it becomes so good that it's the only option? There's no need for it to be profitable, so it can inevitably undercut private sector competitors. Do you want to live in a country where the central bank controls and monitors your ability to transact with other people? Just last year, the Canadian government weaponized "debanking" in an effort to quell peaceful protests against vaccination mandates. They restricted the bank accounts of people who peacefully disagreed with government policy stances. And that was just with the status quo of deputizing private banks to enforce the sanctions against the individual citizens - imagine how much more systemized and effective it would be as a coercion measure if the bank accounts were directly managed and controlled by the government.
      - gtirloni 3y ago
        > What happens when it becomes so good that it's the only option? Nothing is stopping banks from creating something better.
        cubefox 3y ago
        But not something cheaper.
earthboundkid 3y ago
When I lived in Japan twenty years ago, everybody just wired money electronically and checks were long obsolete. In the US, I write checks every week or so. They also had a system where you would put your checkbook into the teller machine and it would print your credits and debits into the book for you. It was very convenient. On the downside, the ATMs were turned off (!) during national holidays, so you had to get cash beforehand.
- 2143 3y ago
  > They also had a system where you would put your checkbook into the teller machine and it would print your credits and debits into the book for you. That's intresting to know. Where I'm at, we had (still have?) a "passbook", a small booklet where you could get all your transactions printed onto. But AFAIK we couldn't do it ourselves through the teller machine though. Once in a few months or so you go to the respective bank and ask the staff there to update the passbook. They use a machine, however. Of course, there days it's unnecessary as you can electronically download a list of your transactions for a given period from the bank's website/app.
  - notRobot 3y ago
    I've seen (and actually even used once, I think) automatic passbook updating printer machines in quite a few ATMs in some places.
- zerocrates 3y ago
  Surprised you're writing checks every week: I haven't written a check in years. ACH transfers, sure, but not physical checks. I do still receive them occasionally, almost always as printed checks from companies.
  - xp84 3y ago
    It depends. I have to use checks to pay my landscaper and housekeeper, because there isn't another unilateral payment document. By this I mean, in the US everyone could use CashApp, Venmo, PayPal, Zelle (glorified ACH, right?), etc. for p2p payment. If you have the same bank, many banks have a trivial "send money to another customer's account" feature. However, to do so requires essentially a 'handshake' where the two parties agree on a method. Checks require no up-front handshake, since everyone knows what to do with a check (deposit it at your ATM, take a picture of it with mobile app, or take it to a check-cashing place or the issuing bank). If I could print on paper a key or QR code that allows you to claim the money into the account of your choice, like a check does, I'd use that. Sadly, banks seem to have put their effort into Zelle instead.
tomcam 3y ago
Not my good friend from Tuvalu
WeylandYutani 3y ago
It's true that America is very far behind now but they're also the ones who started creditcards all the way back in the 1950s. Anyway I have a theory: big countries are too far up their own ass to notice or care what the rest of the world is up to. Compare a small, international oriented country like the Netherlands or Denmark to sleepy provincial Germany.
- eru 3y ago
  Singapore might be another interesting example. They are very much living the future.
seanalltogether 3y ago
> Pick anybody from anywhere and they'll tell you they've been able to do everything they ever wanted to do (with regards to payments) using the already-existing systems of their country. This is like comparing candles and lightbulbs. Sure you can light up your home using both methods just fine, but you end up realizing how inconvenient candles were once you've made the jump to the newer technology.
- rodgerd 3y ago
  Yes, but in many cases the people using candles fight like hell to insist that electric bulbs aren't better, can't be better, and even if they were better, there's no way to have electricity in the US.
  - ghaff 3y ago
    I don't think anyone is arguing that an automagical system of electronic payments that everyone uses wouldn't be desirable [so long as cash wasn't also an option] but writing/depositing a check now and then is so far down my list of weekly annoyances it doesn't even register especially given my bank actually "writes" most of them based on online payment instructions. I'd be much more annoyed if I had to use cash on a regular basis as is the case in some countries.
ksec 3y ago
Which is basically why all the De-Fi, Web 3.0, Cyrpto nonsense are very much US centric.
- rodgerd 3y ago
  When I want to know what the future of money transfers could look like, I'd ask people from, say the Swahili-speaking regions of Africa, not Silicon Valley.
MiddleEndian 3y ago
>Pick anybody from anywhere and they'll tell you they've been able to do everything they ever wanted to do (with regards to payments) using the already-existing systems of their country. As an American, this definitely isn't true for me. I've found so many large organizations fail to make auto-pay work, transferring money is mind-bogglingly slow, and going from magnet to chip-and-pin instead of straight to tap-and-go was a regression. Some companies are able to bill you after you no longer wish them to bill you, while other organizations make it difficult to find out how much you even owe them in the first place when you want to pay them. Not sure how much the last couple can be solved with incremental tech.
- mstibbard 3y ago
  I think that was their point - the rest of the world solved this long ago, it is just the USA that lagged
  - MiddleEndian 3y ago
    I could see that. "Anybody from any country" could have included the US or meant "any other country." But if it did include the US, it would have the assumption that Americans are unaware how terrible our payment systems are (generally untrue I think) or unaware that other countries have better systems (may or may not be generally true).
TulliusCicero 3y ago
> Funny thing about topics like this is that people of any given country is oblivious to how other countries have solved that problem, or the challenges other countries face, or inturn the problems that they themselves face. I thought FedNow was explicitly inspired by the success of India's UPI?

by 2143 3y ago

TechBro8615 3y ago

Sure, but in most countries, those services are provided by banks, not the government. There is certainly something to be said for legislation like open banking regulations that encourages/forces banks to facilitate instant peer to peer payments. But that's a far cry from a service offered directly from the government (okay, technically the fed isn't the government, but it may as well be).

nordsieck 3y ago
OK. But it doesn't seem to me like there's a huge difference between "Know Your Customer" + FDIC and Fed Now aside from removing risk to consumers that most people ignore anyhow.
- TechBro8615 3y ago
  There's a big difference between checking passports before onboarding a customer, and sending every transaction to the federal government in real time.
  - chimeracoder 3y ago
    > There's a big difference between checking passports before onboarding a customer, and sending every transaction to the federal government in real time. I guess there's technically a difference between "sending every transaction to the federal government in real-time" (FedNow) and "sending every transaction to the federal government, in batches three times per day" (the status quo). But from a privacy standpoint, the two are functionally identical.
    - xp84 3y ago
      Can you clarify something? I thought FedNow was for settling up when I, as an ABC Credit Union customer, initiate a transfer of $5000 to you, a Chase customer. Now ABC needs to subtract it from my account, and if successful, tell the Fed to take money out of ABC's Fed account and put it into Chase's, and to tell Chase to expect $5000 (Transaction ID: XXXX?) and here's who it's for. Does FedNow, or whatever batch job it is replacing, involve ABC telling FedNow "This is for a transfer from Jane Doe (SSN 123-45-6789) to Joe Bloggs (SSN 098-76-5432)"? As I imagined it, FedNow would only need to know what bank is sending and what is receiving.
      - patmorgan23 3y ago
        You should do some research on the Automated Clearing House (ACH) system. It's how most bank transfers are done. Most ACH transactions will likely move over to FedNow as it's implemented. I believe both systems do account to account transfer, fed now is just faster and settled instantly, while ACH takes a couple days to settle.
        chimeracoder 3y ago
        > Most ACH transactions will likely move over to FedNow as it's implemented... fed now is just faster and settled instantly, while ACH takes a couple days to settle. FedNow is more of an extension to ACH than a replacement for it. Same-day ACH also exists, although it's relatively new. FedNow is faster than same-day ACH though.
2143 3y ago
This, ladies and gentlemen, illustrates the point I was trying to make.
tiffanyh 3y ago
Sounds like a European view.
lxgr 3y ago
Interbank payment systems are actually provided by central banks or the government (or affiliated organizations of either) in quite a few cases. Europe has TIPS (an ECB-operated implementation of the SEPA Instant Credit Transfer scheme), India has UPI (which is pretty close to the central bank, as far as I understand) etc. In the case of FedNow and TIPS, there are private alternatives as well, such as RTP in the US or EBA Clearing's SEPA Instant implementation in Europe. This is similar to ACH – there's both a public (FedACH) and a private (The Clearing House) implementation/network available.
lampiaio 3y ago
> in most countries, those services are provided by banks, not the government That's something I always point out when telling others how awesome the Brazilian Pix system https://en.wikipedia.org/wiki/Pix_(payment_system) https://en.wikipedia.org/wiki/Pix_(payment_system) is. It's not a private initiative by a bunch of individual banks, but rather a zero-fee payment system managed by the country's central bank: https://www.bcb.gov.br/en/financialstability/pixfaqen https://www.bcb.gov.br/en/financialstability/pixfaqen .
- gtirloni 3y ago
  And it seriously rocks. It has been such a tremendous change to everyday life.
  - TechBro8615 3y ago
    What happens when it becomes so good that it's the only option? There's no need for it to be profitable, so it can inevitably undercut private sector competitors. Do you want to live in a country where the central bank controls and monitors your ability to transact with other people? Just last year, the Canadian government weaponized "debanking" in an effort to quell peaceful protests against vaccination mandates. They restricted the bank accounts of people who peacefully disagreed with government policy stances. And that was just with the status quo of deputizing private banks to enforce the sanctions against the individual citizens - imagine how much more systemized and effective it would be as a coercion measure if the bank accounts were directly managed and controlled by the government.
    - gtirloni 3y ago
      > What happens when it becomes so good that it's the only option? Nothing is stopping banks from creating something better.
      - cubefox 3y ago
        But not something cheaper.

earthboundkid 3y ago

When I lived in Japan twenty years ago, everybody just wired money electronically and checks were long obsolete. In the US, I write checks every week or so. They also had a system where you would put your checkbook into the teller machine and it would print your credits and debits into the book for you. It was very convenient. On the downside, the ATMs were turned off (!) during national holidays, so you had to get cash beforehand.

2143 3y ago
> They also had a system where you would put your checkbook into the teller machine and it would print your credits and debits into the book for you. That's intresting to know. Where I'm at, we had (still have?) a "passbook", a small booklet where you could get all your transactions printed onto. But AFAIK we couldn't do it ourselves through the teller machine though. Once in a few months or so you go to the respective bank and ask the staff there to update the passbook. They use a machine, however. Of course, there days it's unnecessary as you can electronically download a list of your transactions for a given period from the bank's website/app.
- notRobot 3y ago
  I've seen (and actually even used once, I think) automatic passbook updating printer machines in quite a few ATMs in some places.
zerocrates 3y ago
Surprised you're writing checks every week: I haven't written a check in years. ACH transfers, sure, but not physical checks. I do still receive them occasionally, almost always as printed checks from companies.
- xp84 3y ago
  It depends. I have to use checks to pay my landscaper and housekeeper, because there isn't another unilateral payment document. By this I mean, in the US everyone could use CashApp, Venmo, PayPal, Zelle (glorified ACH, right?), etc. for p2p payment. If you have the same bank, many banks have a trivial "send money to another customer's account" feature. However, to do so requires essentially a 'handshake' where the two parties agree on a method. Checks require no up-front handshake, since everyone knows what to do with a check (deposit it at your ATM, take a picture of it with mobile app, or take it to a check-cashing place or the issuing bank). If I could print on paper a key or QR code that allows you to claim the money into the account of your choice, like a check does, I'd use that. Sadly, banks seem to have put their effort into Zelle instead.

tomcam 3y ago

Not my good friend from Tuvalu

WeylandYutani 3y ago

It's true that America is very far behind now but they're also the ones who started creditcards all the way back in the 1950s. Anyway I have a theory: big countries are too far up their own ass to notice or care what the rest of the world is up to. Compare a small, international oriented country like the Netherlands or Denmark to sleepy provincial Germany.

eru 3y ago
Singapore might be another interesting example. They are very much living the future.

seanalltogether 3y ago

> Pick anybody from anywhere and they'll tell you they've been able to do everything they ever wanted to do (with regards to payments) using the already-existing systems of their country. This is like comparing candles and lightbulbs. Sure you can light up your home using both methods just fine, but you end up realizing how inconvenient candles were once you've made the jump to the newer technology.

rodgerd 3y ago
Yes, but in many cases the people using candles fight like hell to insist that electric bulbs aren't better, can't be better, and even if they were better, there's no way to have electricity in the US.
- ghaff 3y ago
  I don't think anyone is arguing that an automagical system of electronic payments that everyone uses wouldn't be desirable [so long as cash wasn't also an option] but writing/depositing a check now and then is so far down my list of weekly annoyances it doesn't even register especially given my bank actually "writes" most of them based on online payment instructions. I'd be much more annoyed if I had to use cash on a regular basis as is the case in some countries.

ksec 3y ago

Which is basically why all the De-Fi, Web 3.0, Cyrpto nonsense are very much US centric.

rodgerd 3y ago
When I want to know what the future of money transfers could look like, I'd ask people from, say the Swahili-speaking regions of Africa, not Silicon Valley.

MiddleEndian 3y ago

>Pick anybody from anywhere and they'll tell you they've been able to do everything they ever wanted to do (with regards to payments) using the already-existing systems of their country. As an American, this definitely isn't true for me. I've found so many large organizations fail to make auto-pay work, transferring money is mind-bogglingly slow, and going from magnet to chip-and-pin instead of straight to tap-and-go was a regression. Some companies are able to bill you after you no longer wish them to bill you, while other organizations make it difficult to find out how much you even owe them in the first place when you want to pay them. Not sure how much the last couple can be solved with incremental tech.

mstibbard 3y ago
I think that was their point - the rest of the world solved this long ago, it is just the USA that lagged
- MiddleEndian 3y ago
  I could see that. "Anybody from any country" could have included the US or meant "any other country." But if it did include the US, it would have the assumption that Americans are unaware how terrible our payment systems are (generally untrue I think) or unaware that other countries have better systems (may or may not be generally true).

TulliusCicero 3y ago

> Funny thing about topics like this is that people of any given country is oblivious to how other countries have solved that problem, or the challenges other countries face, or inturn the problems that they themselves face. I thought FedNow was explicitly inspired by the success of India's UPI?