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No that isn't surprising because those were new buildouts of brand new systems that didn't exist before. In a lot of cases, those countries skipped over a whole

No that isn't surprising because those were new buildouts of brand new systems that didn't exist before. In a lot of cases, those countries skipped over a whole bunch of in between phases, like how China skipped over a bunch of telecom infrastructure buildout and so managed to avoid a lot of similar issues there. The US digitalized it's financial industries the earliest and so it has the most pre-existing infrastructure to maintain and past decisions to deal with the consequences of. The finance industry was quite literally the first major industry to computerize in the US, most other countries got started decades later due to a lot of factors but mostly either poverty, being behind the iron curtain, or lack of access to reliable computers. It's always more difficult when you have millions of active users and SLAs to abide by, and regulators and auditors that are aware of every possible thing that can go wrong and that they should be asking questions about.

grecy 3y ago
> most other countries got started decades later due to a lot of factors but mostly either poverty, being behind the iron curtain, or lack of access to reliable computers You are completely ignoring many countries here that have had instant, free transfers since the 90s. It never ceases to amaze the lengths Americans will go to explaining why they are behind the rest of the world in some way or other while trying as hard as possible not to say "because profit".
- ex3ndr 3y ago
  Like what? Most countries in europe still don't have transfers by phone number?
  - manuelmoreale 3y ago
    What would be the benefit of that if you don’t mind me asking?
  - lxgr 3y ago
    Yes, because they have the real thing: Instant and free cross-country transfers by bank account number. Why use something strictly less powerful? A phone number based transfer service can be implemented as a directory service on top of that much more easily.
  - cornholio 3y ago
    You mean like MPesa, the exploitative pseudo banking system popular in African countries where mobile phones are more likely to be available than electricity and running water?
- thecodedmessage 3y ago
  “Because profit” is a bad explanation. It’s super incomplete.
lxgr 3y ago
All European countries have been doing banking for a while now, with some institutions predating computers by a couple of centuries, yet they still somehow managed to roll out SEPA Instant. And to give another counterexample: The US has had cell phone networks much longer than many other countries, yet the 5G deployment here is pretty competitive internationally. The second mover advantage is real, but I don’t think it can explain the holdup here.
- cornholio 3y ago
  Not only did Western Europe digitized banking about the same time as US, but each country had its own proprietary system of payment, financial regulation, account format etc. Before SEPA Europe was a single market in name only, with expensive SWIFT payments being the most common way to settle cross border transactions. US has a simpler task by any conceivable yard stick, but there is absolutely no political will to get it done.
- rsynnott 3y ago
  The cell phones aren’t a _great_ example, arguably; the US was behind Europe in mobile phone adoption and rollout for a long time, and in particular only adopted GSM rather late (not til the late noughties for some telcos!); at that point a large part of the US network was basically ripped and replaced. But the point still basically stands; Sweden, which had the first mobile phone network that we’d recognise as such today, has a competitive mobile phone network today.
rsynnott 3y ago
… Eh? SEPA Instant is based on, er, SEPA Non-Instant, which itself is based on a bunch of predecessor systems. I don’t think the US _did_ digitise its financial industry first, did it? That’d be the UK, with Girobank, and BACS; the US ACH system showed up a few years later. Spoiler: the UK has instant payments (FPS is about 15 years old). Eurocheque, a sort of spiritual predecessor to SEPA, showed up the same year as Nacha (though most European countries had their own national systems until the early noughties, when they were largely replaced by SEPA).
kalleboo 3y ago
Japan has some of the creakiest banking systems dating from the 70's (they used to shut down ATMs for a week over new year not too many years ago, and most people still maintain a paper bank book that gets printed inside the ATM using a dot matrix printer) but they still managed to move over 1000 financial institutions to 24/7 instant payments like 4 years ago once they started getting competition from fintech services.
brnt 3y ago
[flagged]
o-o- 3y ago
> No that isn't surprising because those were new buildouts of brand new systems that didn't exist before Granted tech leaping explains why many third world countries are ahead, however the US was no where near the first to digitize its banking infrastructure. I've heard stories from former (now-retired) colleagues who went to visit banks in the US to showcase Skandinaviska Bankens digital ledger. This was around 1968, and the US bank executives were allededgly blown away. The EU banking landscape is far more heterogeneous – 24 languages and 27 different nationalities, each with their own jurisdiction. All in all against all odds and still Instant SEPA is in place (not to mention the national mobile account-to-account solutions). Technical debt does not explain the absense of instant payments in the US. I'm convinced that the real reason lies in the imbalance between political and corporate will. Or put differently: an effect of what happens when corporate will dictates (finances) political will.
- jjeaff 3y ago
  ACH transfers are basically instant in the US. But because they can, the sending bank holds on to the outgoing transfer for as long as they can get away with and the receiving bank waits to make the transfer available to the customer for as long as they can get away with. this allows banks to squeeze a little bit more return out of the money, and more importantly, the longer money is in limbo, the more likely customers are to overdraft thus incurring penalty fees. additionally, slow transfers helps keep customer money in same-bank services. if I can instantly transfer money in from my brokerage service, then I have less incentive to use the brokerage service offered by my bank.
  - astrange 3y ago
    > this allows banks to squeeze a little bit more return out of the money There was no return for the last decade because we had zero interest rates the whole time.
  - imtringued 3y ago
    The real reason is that banks are destroying liquidity to make netting/clearing possible. The longer you wait, the less liquid reserves you need in case of large outgoing transfers, because they were offset by incoming transfers.

grecy 3y ago

> most other countries got started decades later due to a lot of factors but mostly either poverty, being behind the iron curtain, or lack of access to reliable computers You are completely ignoring many countries here that have had instant, free transfers since the 90s. It never ceases to amaze the lengths Americans will go to explaining why they are behind the rest of the world in some way or other while trying as hard as possible not to say "because profit".

ex3ndr 3y ago
Like what? Most countries in europe still don't have transfers by phone number?
- manuelmoreale 3y ago
  What would be the benefit of that if you don’t mind me asking?
- lxgr 3y ago
  Yes, because they have the real thing: Instant and free cross-country transfers by bank account number. Why use something strictly less powerful? A phone number based transfer service can be implemented as a directory service on top of that much more easily.
- cornholio 3y ago
  You mean like MPesa, the exploitative pseudo banking system popular in African countries where mobile phones are more likely to be available than electricity and running water?
thecodedmessage 3y ago
“Because profit” is a bad explanation. It’s super incomplete.

lxgr 3y ago

All European countries have been doing banking for a while now, with some institutions predating computers by a couple of centuries, yet they still somehow managed to roll out SEPA Instant. And to give another counterexample: The US has had cell phone networks much longer than many other countries, yet the 5G deployment here is pretty competitive internationally. The second mover advantage is real, but I don’t think it can explain the holdup here.

cornholio 3y ago
Not only did Western Europe digitized banking about the same time as US, but each country had its own proprietary system of payment, financial regulation, account format etc. Before SEPA Europe was a single market in name only, with expensive SWIFT payments being the most common way to settle cross border transactions. US has a simpler task by any conceivable yard stick, but there is absolutely no political will to get it done.
rsynnott 3y ago
The cell phones aren’t a _great_ example, arguably; the US was behind Europe in mobile phone adoption and rollout for a long time, and in particular only adopted GSM rather late (not til the late noughties for some telcos!); at that point a large part of the US network was basically ripped and replaced. But the point still basically stands; Sweden, which had the first mobile phone network that we’d recognise as such today, has a competitive mobile phone network today.

rsynnott 3y ago

… Eh? SEPA Instant is based on, er, SEPA Non-Instant, which itself is based on a bunch of predecessor systems. I don’t think the US _did_ digitise its financial industry first, did it? That’d be the UK, with Girobank, and BACS; the US ACH system showed up a few years later. Spoiler: the UK has instant payments (FPS is about 15 years old). Eurocheque, a sort of spiritual predecessor to SEPA, showed up the same year as Nacha (though most European countries had their own national systems until the early noughties, when they were largely replaced by SEPA).

kalleboo 3y ago

Japan has some of the creakiest banking systems dating from the 70's (they used to shut down ATMs for a week over new year not too many years ago, and most people still maintain a paper bank book that gets printed inside the ATM using a dot matrix printer) but they still managed to move over 1000 financial institutions to 24/7 instant payments like 4 years ago once they started getting competition from fintech services.

brnt 3y ago

[flagged]

o-o- 3y ago

> No that isn't surprising because those were new buildouts of brand new systems that didn't exist before Granted tech leaping explains why many third world countries are ahead, however the US was no where near the first to digitize its banking infrastructure. I've heard stories from former (now-retired) colleagues who went to visit banks in the US to showcase Skandinaviska Bankens digital ledger. This was around 1968, and the US bank executives were allededgly blown away. The EU banking landscape is far more heterogeneous – 24 languages and 27 different nationalities, each with their own jurisdiction. All in all against all odds and still Instant SEPA is in place (not to mention the national mobile account-to-account solutions). Technical debt does not explain the absense of instant payments in the US. I'm convinced that the real reason lies in the imbalance between political and corporate will. Or put differently: an effect of what happens when corporate will dictates (finances) political will.

jjeaff 3y ago
ACH transfers are basically instant in the US. But because they can, the sending bank holds on to the outgoing transfer for as long as they can get away with and the receiving bank waits to make the transfer available to the customer for as long as they can get away with. this allows banks to squeeze a little bit more return out of the money, and more importantly, the longer money is in limbo, the more likely customers are to overdraft thus incurring penalty fees. additionally, slow transfers helps keep customer money in same-bank services. if I can instantly transfer money in from my brokerage service, then I have less incentive to use the brokerage service offered by my bank.
- astrange 3y ago
  > this allows banks to squeeze a little bit more return out of the money There was no return for the last decade because we had zero interest rates the whole time.
- imtringued 3y ago
  The real reason is that banks are destroying liquidity to make netting/clearing possible. The longer you wait, the less liquid reserves you need in case of large outgoing transfers, because they were offset by incoming transfers.