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Yes, that is absolutely a use case. Similar to Venmo, there is also a Request for Payment (RFP) mechanism. I'm on the Request for Payment (RFP) Work Group that

Yes, that is absolutely a use case. Similar to Venmo, there is also a Request for Payment (RFP) mechanism. I'm on the Request for Payment (RFP) Work Group that is composed of a number of financial institutions, service providers, and billers. Netflix is part of the RFP Work Group. So presumably they are interested in offering consumers the ability to pay for Netflix using FedNow instead of a credit card. Instead of Netflix paying ~$0.50 in credit card processing fees per U.S. subscription they'll probably be able to find a bank willing to charge them < $0.25. It also gives consumers more control as they have to authorize each charge.

ke88y 3y ago
> they'll probably be able to find a bank willing to charge them < $0.25 I guess that includes some very small values, but the upper bound seems ridiculously high.
govg 3y ago
Have you looked at other systems across the world for inspiration / design choices, and if so, could you elaborate on how this system compares? For example, the use case mentioned is probably the prime use case for UPI in India, which has now been extended to become a full fledged payment network alongside CC networks etc.
kelnos 3y ago
> So presumably they are interested in offering consumers the ability to pay for Netflix using FedNow instead of a credit card. I do wonder how stuff like this will shake out. I will use a credit card, always, with any vendor that doesn't pass along credit card fees to the customer in some way. (Why would I choose otherwise? The credit card gives me rewards, and better fraud protection.) But more and more, I see companies charging "convenience fees" for credit card usage or offering "discounts" for cash/debit. Hell, T-Mobile just started requiring you not use a credit card to get their $5/mo autopay discount. So this is all cool (and perhaps would make it easier for people who don't have a credit card to pay for Netflix), but I don't see why I'd use anything but a credit card to pay for my Netflix subscription, unless they offer discounts for using FedNow. Which... they probably won't?
- LadyCailin 3y ago
  Credit card fees that aren’t passed through to you are a bit tragedy of the commons. Probably good for them to go away. It’s fine if you choose to pay them, and it’s still worth it to you, but otherwise you’re forcing everyone around you to subsidize your credit card rewards. That’s not fair.
  - oorza 3y ago
    Alternatively, everyone not taking advantage of the credit card protections isn't taking advantage of what's offered around them. Everyone should be subsidizing everyone else, because no one should be using a debit card to make direct consumer purchases in 2023. It's too fraught with risk comparatively, and even the scummiest of the sub-prime credit cards give you a grace period to not accrue interest.
    - paradaux 3y ago
      No one? That's a rather brash statement to make. Here in Ireland I can count on zero hands how many people use credit cards on a day to day basis. Debit cards are the norm in much of the EU I would assume.
      - cubefox 3y ago
        They are.
      - elyobo 3y ago
        Credit cards are pretty common here in AU; I don't care so much about the fraud protection, but up to 55 day interest free periods are common (if the bill is paid in full each month) and so the cards literally save me money because I earn interest on savings and/or don't pay interest on mortgage vs having to pay everything immediately. Rewards on top are an added bonus.
        audunw 3y ago
        To me I feel the money Id save on using the credit card is so infinitesimally small that it’s easily worth it to use debit for the ease of mind that everything is settled and I truly can afford everything I pay for. I also hate credit card rewards programs with a passion because they just complicate our lives to get back money that should’ve just been lower credit card fees to begin with. The argument that you save interest on savings account doesn’t make any sense at all because I count my credit cards towards my emergency buffer. If I maxed out the credit card I would absolutely make sure to keep more money in my savings account. I get that it’s different for people living paycheck to paycheck. But arguing that credit is a solution for the poor is a slippery slope. We should solve those problems other ways.
buzer 3y ago
I hope they extend that to actual invoicing standard, i.e. pass the invoice details in that RFP message, like something similar to https://www.finanssiala.fi/en/topics/finvoice-standard/ https://www.finanssiala.fi/en/topics/finvoice-standard/
TylerE 3y ago
That sounds odd. I can't imagine netflix giving up the stickiness of automatic recurring billing to say <2% of the transaction cost.
- di4na 3y ago
  You realise you can do this over bank account? At least in the EU, a recurring billing over bank transfer is totally a thing...
  - TylerE 3y ago
    From the GP: "Netflix is part of the RFP Work Group. So presumably they are interested in offering consumers the ability to pay for Netflix using FedNow instead of a credit card. Instead of Netflix paying ~$0.50 in credit card processing fees per U.S. subscription they'll probably be able to find a bank willing to charge them < $0.25. It also gives consumers more control as they have to authorize each charge." NB that last sentense. FedNow does NOT support recurring.
pyuser583 3y ago
That sounds great!
konschubert 3y ago
Why should they not be able to find a bank that charges <$0.05? Other than with credit cards, there are no costs for customer kickbacks and chargebacks.
tivert 3y ago
> I'm on the Request for Payment (RFP) Work Group that is composed of a number of financial institutions, service providers, and billers. I'm just randomly curious: do you know which Federal Reserve Bank FedNow was developed at?

ke88y 3y ago

> they'll probably be able to find a bank willing to charge them < $0.25 I guess that includes some very small values, but the upper bound seems ridiculously high.

govg 3y ago

Have you looked at other systems across the world for inspiration / design choices, and if so, could you elaborate on how this system compares? For example, the use case mentioned is probably the prime use case for UPI in India, which has now been extended to become a full fledged payment network alongside CC networks etc.

kelnos 3y ago

> So presumably they are interested in offering consumers the ability to pay for Netflix using FedNow instead of a credit card. I do wonder how stuff like this will shake out. I will use a credit card, always, with any vendor that doesn't pass along credit card fees to the customer in some way. (Why would I choose otherwise? The credit card gives me rewards, and better fraud protection.) But more and more, I see companies charging "convenience fees" for credit card usage or offering "discounts" for cash/debit. Hell, T-Mobile just started requiring you not use a credit card to get their $5/mo autopay discount. So this is all cool (and perhaps would make it easier for people who don't have a credit card to pay for Netflix), but I don't see why I'd use anything but a credit card to pay for my Netflix subscription, unless they offer discounts for using FedNow. Which... they probably won't?

LadyCailin 3y ago
Credit card fees that aren’t passed through to you are a bit tragedy of the commons. Probably good for them to go away. It’s fine if you choose to pay them, and it’s still worth it to you, but otherwise you’re forcing everyone around you to subsidize your credit card rewards. That’s not fair.
- oorza 3y ago
  Alternatively, everyone not taking advantage of the credit card protections isn't taking advantage of what's offered around them. Everyone should be subsidizing everyone else, because no one should be using a debit card to make direct consumer purchases in 2023. It's too fraught with risk comparatively, and even the scummiest of the sub-prime credit cards give you a grace period to not accrue interest.
  - paradaux 3y ago
    No one? That's a rather brash statement to make. Here in Ireland I can count on zero hands how many people use credit cards on a day to day basis. Debit cards are the norm in much of the EU I would assume.
    - cubefox 3y ago
      They are.
    - elyobo 3y ago
      Credit cards are pretty common here in AU; I don't care so much about the fraud protection, but up to 55 day interest free periods are common (if the bill is paid in full each month) and so the cards literally save me money because I earn interest on savings and/or don't pay interest on mortgage vs having to pay everything immediately. Rewards on top are an added bonus.
      - audunw 3y ago
        To me I feel the money Id save on using the credit card is so infinitesimally small that it’s easily worth it to use debit for the ease of mind that everything is settled and I truly can afford everything I pay for. I also hate credit card rewards programs with a passion because they just complicate our lives to get back money that should’ve just been lower credit card fees to begin with. The argument that you save interest on savings account doesn’t make any sense at all because I count my credit cards towards my emergency buffer. If I maxed out the credit card I would absolutely make sure to keep more money in my savings account. I get that it’s different for people living paycheck to paycheck. But arguing that credit is a solution for the poor is a slippery slope. We should solve those problems other ways.

buzer 3y ago

I hope they extend that to actual invoicing standard, i.e. pass the invoice details in that RFP message, like something similar to https://www.finanssiala.fi/en/topics/finvoice-standard/ https://www.finanssiala.fi/en/topics/finvoice-standard/

TylerE 3y ago

That sounds odd. I can't imagine netflix giving up the stickiness of automatic recurring billing to say <2% of the transaction cost.

di4na 3y ago
You realise you can do this over bank account? At least in the EU, a recurring billing over bank transfer is totally a thing...
- TylerE 3y ago
  From the GP: "Netflix is part of the RFP Work Group. So presumably they are interested in offering consumers the ability to pay for Netflix using FedNow instead of a credit card. Instead of Netflix paying ~$0.50 in credit card processing fees per U.S. subscription they'll probably be able to find a bank willing to charge them < $0.25. It also gives consumers more control as they have to authorize each charge." NB that last sentense. FedNow does NOT support recurring.

pyuser583 3y ago

That sounds great!

konschubert 3y ago

Why should they not be able to find a bank that charges <$0.05? Other than with credit cards, there are no costs for customer kickbacks and chargebacks.

tivert 3y ago

> I'm on the Request for Payment (RFP) Work Group that is composed of a number of financial institutions, service providers, and billers. I'm just randomly curious: do you know which Federal Reserve Bank FedNow was developed at?