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> 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 co

by 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.

by o-o- 3y ago

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.