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Australia has 4ish banks. The US has 4000. It’s just not the same problem

viraptor 3y ago
It's the same problem for the biggest 4 banks. The rest can join the "future" in their own time. It's after the first 4 that you go from trillions to billions in assets. They should have some reasonable pull. 10 should be still a low enough number to make an agreement and effectively make the rest follow or lose out.
- naniwaduni 3y ago
  The biggest 4 banks ... do support near-instant transfers? Probably in at least three forms each pairwise? I'm not sure why we're pretending the US doesn't have infrastructure for instant transfers, there are like at least four directly supported systems, a couple accidental ones, and a whole host of third-parties in the space, each with a different set of tradeoffs and spotty support.
  - viraptor 3y ago
    Yeah... That's not really a solution, is it? They're not pushing a common standard that way and the small banks will have to play stupid games instead of implementing "the" solution.
  - esrauch 3y ago
    Do they? When I move money between two accounts each in large banks it takes a day or more to clear. It would literally be an order of magnitude faster for me to walk to the a branch of one, withdraw, walk to a branch of the other to deposit than it is to move the money online.
grecy 3y ago
Scale makes no difference. You make a law (or regulation or whatever) and each bank does the work. Who cares if there are 4 or 4000, each bank just does it. US Banks are forced to do new things all the time to remain compliant (PCI anyone?)...and they get it done. This is not getting done because the banks make a lot of money not doing it, and lobby to keep it that way
phs318u 3y ago
As at Q2 2023, Australia had 96 "authorised deposit-taking institutions" which is our definition of a bank. https://www.statista.com/statistics/1211692/australia-number-of-banks/ https://www.statista.com/statistics/1211692/australia-number...
rstuart4133 3y ago
> Australia has 4ish banks. The US has 4000. It’s just not the same problem Your right in thinking the situation is different between the USA and Australia, but the different isn't 4ish vs 4,000 (it's really 100ish vs 4,000). The immediate reason is that Australia solves these problems from the top down. We've done it over and over in banking. Credit cards were pushed down decades ago (ergo, we haven't needed cheques in that long), then EFTPOS with Chip&Pin (no signature) was pushed down, plus a list of other things. The latest thing (in the last few years) is the Reserve bank of Australia's new payments platform: https://www.rba.gov.au/payments-and-infrastructure/new-payments-platform/ https://www.rba.gov.au/payments-and-infrastructure/new-payme.... Osko is a instantaneous bank transfer system for us retail plebs that is built on top of it. Meanwhile the USA hasn't pulled this off once. If you look deeper at Australia, you will see it isn't just banking. There was a recent headline here about engineered stone being banned. Wiping out an industry was Australias solution to it killing too many tradesmen in their 30's. In general strong federal level laws aimed at creating efficient markets is something the Australian system does, and it's something Australia's seem very comfortable with. The USA on the other hand is just hopeless at it, and the USA voting public phobia's about "big government" boil to the surface every time they try. An example of something the rest of the world pulled on that the USA can't: metric. And without that sort of leadership from the top you have no hope of corralling a herd of banks so they move in the same direction.

It's the same problem for the biggest 4 banks. The rest can join the "future" in their own time. It's after the first 4 that you go from trillions to billions in assets. They should have some reasonable pull. 10 should be still a low enough number to make an agreement and effectively make the rest follow or lose out.

naniwaduni 3y ago
The biggest 4 banks ... do support near-instant transfers? Probably in at least three forms each pairwise? I'm not sure why we're pretending the US doesn't have infrastructure for instant transfers, there are like at least four directly supported systems, a couple accidental ones, and a whole host of third-parties in the space, each with a different set of tradeoffs and spotty support.
- viraptor 3y ago
  Yeah... That's not really a solution, is it? They're not pushing a common standard that way and the small banks will have to play stupid games instead of implementing "the" solution.
- esrauch 3y ago
  Do they? When I move money between two accounts each in large banks it takes a day or more to clear. It would literally be an order of magnitude faster for me to walk to the a branch of one, withdraw, walk to a branch of the other to deposit than it is to move the money online.

grecy 3y ago

Scale makes no difference. You make a law (or regulation or whatever) and each bank does the work. Who cares if there are 4 or 4000, each bank just does it. US Banks are forced to do new things all the time to remain compliant (PCI anyone?)...and they get it done. This is not getting done because the banks make a lot of money not doing it, and lobby to keep it that way

phs318u 3y ago

As at Q2 2023, Australia had 96 "authorised deposit-taking institutions" which is our definition of a bank. https://www.statista.com/statistics/1211692/australia-number-of-banks/ https://www.statista.com/statistics/1211692/australia-number...

rstuart4133 3y ago

> Australia has 4ish banks. The US has 4000. It’s just not the same problem Your right in thinking the situation is different between the USA and Australia, but the different isn't 4ish vs 4,000 (it's really 100ish vs 4,000). The immediate reason is that Australia solves these problems from the top down. We've done it over and over in banking. Credit cards were pushed down decades ago (ergo, we haven't needed cheques in that long), then EFTPOS with Chip&Pin (no signature) was pushed down, plus a list of other things. The latest thing (in the last few years) is the Reserve bank of Australia's new payments platform: https://www.rba.gov.au/payments-and-infrastructure/new-payments-platform/ https://www.rba.gov.au/payments-and-infrastructure/new-payme.... Osko is a instantaneous bank transfer system for us retail plebs that is built on top of it. Meanwhile the USA hasn't pulled this off once. If you look deeper at Australia, you will see it isn't just banking. There was a recent headline here about engineered stone being banned. Wiping out an industry was Australias solution to it killing too many tradesmen in their 30's. In general strong federal level laws aimed at creating efficient markets is something the Australian system does, and it's something Australia's seem very comfortable with. The USA on the other hand is just hopeless at it, and the USA voting public phobia's about "big government" boil to the surface every time they try. An example of something the rest of the world pulled on that the USA can't: metric. And without that sort of leadership from the top you have no hope of corralling a herd of banks so they move in the same direction.