This is wild. Here in the UK we just transfer money from bank to bank in an instant using the banks own app.
this post was submitted on 24 Jul 2023
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In Spain we have Bizum - transfer money using a persons mobile phone number (as long as you’re both registered with your bank). Instant and free
Same in Poland. That, and Blik system which let's you send money to a phone number (if it's also registered with Blik) and it's actually instant. Not "next transfer window" like Elixir transfers, instant.
And yes, completely free.
The US has this, it's called Zelle, every bank seems to have it, and it's instantaneous. For some reason it's just not popular, probably because Paypal and others are already entrenched.
Same in Canada. It's like going back in time when crossing the border when it comes to banking and payment.
And I assumed it was the same everywhere!
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For those that don't know in the US even if you use a third party system the final settlement of the money still has to go through the Fed and it's usually as either a Wire or an ACH transaction. ACH is slow and batch processes which can be daily. Wire can be quicker but more expensive. Some banks give you access to funds sooner but it's still not settled until that NACHA batch file goes through the Fed.
Anyway there are two instant payment systems coming to the US: RTP (by the Automated Clearing House (ACH)) and FedNow.
Outside the US they've already had other instant payment systems.
Yes after a decade of living in Europe I can only say, "fucking finally!"
Thank you for this, because as an Australian I was quite confused. We have had "instant" payment systems for as long as I can remember between banks. The US banking and payment system seems stuck in the dark ages.
This didn't kill things like PayPal though, they're completely different services.
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While I’ve used PayPal for, holy shit, decades… my recent need to move cash around with my Gen Z children caused me to venture into Venmo and CashApp. While I’m skeptical of the proper execution of anything new the federal government introduces, I can’t imagine they could create a WORSE experience than these new-age, middle-man processors. I’ve had to call my bank more times in the last two weeks to unlock fraud alerts than I have in the past twenty years. Then, after doing that, the damned processors themselves start declining $5 transactions for no apparent reason. I’d sooner poke myself in the eye than try to make a payment.
Finally, it's ridiculous we have to pay fees to a private company just to easily transfer money.
Finger crossed it'll be compatible with IBAN/SWIFT banking so we can actually be a part of the International community.
So in the UK we have had a standard free "instant" payment system between banks for what feels like a couple of decades now (and compatibility with the IBAN for at least half that time). Given that, how has this taken so long? What did people do before Venmo?
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Welcome to 2003!
-Signed: Canada.
For real, we’ve had e-transfer forever…
We had bank to bank and bank to merchant over the internet in 1996. And by 2003 the interac e-transfer for customer to customer had rolled out countrywide.
The history is actually pretty impressive.
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Honestly, once it reaches critical mass. It will mean the end of PayPal, Venmo et al AND the credit card industry as a whole.
I think between rewards and actual credit, credit cards will probably be fine, but I'm curious if you think this solves for either of these use cases.
Yeah I'm failing to see how this replaces either of those benefits...
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Credit card rewards are really not worth it. These programs are largely funded by the fees that are charged to merchants which are ultimately passed on to you at time of purchase.
I would much rather have reduced costs of goods rather than have paltry credit card reward programs.
I doubt it will hit the credit card industry that much. We have something like this in Canada, Interac, and credit cards are alive and well. They may actually prefer this, because people who keep zero balances may be less inclined to use credit cards instead of debit cards and there may be a larger market of businesses with card-processing capability to cater to those who have debit cards but don't have the credit to obtain credit cards.
We have something like this in Canada, Interac
Interac is not the same thing at all, the US equivalent is Zelle.
FedNow does instant EFT payments, which is something Canada does not have.
Why would this mean the end to the credit card industry...?
Processing transactions with credit cards incurs fees from middlemen and unnecessarily complicates the merchant-buyer relationship. The merchant ends up paying these fees and ultimately passes this cost to the consumer in the form of a 3-5% or more markup of goods. In some cases, even cash customers are paying the hidden markup as well.
With FedNow, this has the potential to bypass all of this messiness and severely undercut debit and credit card processing networks. Thus slowly bleeding them out of market share.
I can definitely see a new market segment of payment processing which disrupts the existing status quo. Could very easily cover expenses of running the operation on a shoe string budget, charge 1-2 cents per transaction, and become profitable in just under a year (assuming high adoption).
In the end, smaller merchants are able to compete or in some cases undercut bigger stores since they are saving money on CC fees. Consumer has the benefit of more competition in the market and getting that better price. Overall decreased cost of living.
Bad news for you. Many countries already have this and PayPal is still super convienient way to pay for stuff. We have standing orders for reoccuring payments to companies direct from bank but otherwise its still done with apps
We have similar system in Europe, cc and debit cards, PayPal (And similar) payment processors remain popular.
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americans you've got it only now?
Have you seen our presidents or politicians? We're working with what we've got and fighting to urge to sink into depression and dispair
Thank god. I very much so dislike having to use 3rd parties to transfer e-bucks. Always have to do the 'I have x, do you have x?' dance. Been using cash fairly often since it's just easier.
I used to live in the US before and payments between banks/accounts/government entities where a disaster and confusing unless you were using Zelle IF the other person had Zelle.
I live in Brasil now and I'm surprises of how much more efficient the payment processes are here.
I used to have to pay the USCIS with checks, sending about $500 a year by mail (USPS), something that gave me so much anxiety I could barely sleep because I could barely afford it and it could just... get lost.
Today I paid for my permanent Visa here in Brasil and all ot took was reading a QR code and the website auto-updated as soon as I made the payment. That same service you can use it to transfer money to people, stores, supermarkets, anything you can think of.
Maybe some people prefer the old fashioned way but my question is, wh my is the US still using mail and checks in 2023?
With the USCIS specifically it's because they're bound by laws that are meant to create pain and reduce the number of people who successfully navigate the system. Stupid xenophobes won't let us have a functional immigration system.
My credit union already uses Zelle. I wonder what this might mean for that. Sadly the article didn’t have a comment on it.
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