Fed expects to launch long-awaited Faster Payments System by 2023(forkast.news)
forkast.news
Fed expects to launch long-awaited Faster Payments System by 2023
https://forkast.news/headlines/fed-faster-payments-system-by-2023/
22 comments
FedNow was also discussed 12 days ago at https://news.ycombinator.com/item?id=32510581
I'm starting to feel more hopeful about the US's digital infrastructure.
If this goes well instant payments will be available with no ACH 2 day withdrawal delay.
The IRS is exploring a system for people to file taxes online.
The State Department is building a system to renew your passport totally online.
I think the last two items are a result of the Inflation Reduction Act. I hope this momentum continues and we can continue making as many government services available digitally. While some will complain how bad these systems will be - I'd rather at least have them than not and allow them to improve.
The sooner the better.
If this goes well instant payments will be available with no ACH 2 day withdrawal delay.
The IRS is exploring a system for people to file taxes online.
The State Department is building a system to renew your passport totally online.
I think the last two items are a result of the Inflation Reduction Act. I hope this momentum continues and we can continue making as many government services available digitally. While some will complain how bad these systems will be - I'd rather at least have them than not and allow them to improve.
The sooner the better.
[deleted]
Wait you guys don't have online taxes yet?!?
Extremely sad we need to give the IRS $80 billion to accomplish something they should have provided decades ago.
You’re way off. The money earmarked for that project is $15 million, and it’s for a study on how the IRS would implement such a system.
Source (PDF): https://crsreports.congress.gov/product/pdf/IN/IN11977
> In addition, the IRS would receive $15 million under this bill to fund a task force that would study the cost and feasibility of creating a free direct e-file program.
> In addition, the IRS would receive $15 million under this bill to fund a task force that would study the cost and feasibility of creating a free direct e-file program.
And the next sentence:
"The agency previously committed not to create its own tax filing software as part of an alliance called the Free File Program. In exchange, private tax filing software companies agreed to provide free services to low- and moderate-income taxpayers."
And then continues:
"Roughly 4% of eligible taxpayers used the Free File Program’s private providers to file their taxes in 2020. Intuit and H&R Block, who previously represented two-thirds of the program’s usage, both left the agreement in the past three years."
"The agency previously committed not to create its own tax filing software as part of an alliance called the Free File Program. In exchange, private tax filing software companies agreed to provide free services to low- and moderate-income taxpayers."
And then continues:
"Roughly 4% of eligible taxpayers used the Free File Program’s private providers to file their taxes in 2020. Intuit and H&R Block, who previously represented two-thirds of the program’s usage, both left the agreement in the past three years."
That sounds likes a $15 million design doc.
I think it's for the pre-design doc.
Terrible misuse of public funds. Why not just depend on a private entity with the right watchers in place?
That leads to situations like Intuit capturing the IRS and making some agreement with them to make a shitty free filing solution that nobody wants to use because it's so bad.
It's not even a revolving door anymore, it's just unchecked corruption.
It's not even a revolving door anymore, it's just unchecked corruption.
To add to this: current US system siphons 10s of billions of dollars yearly, adding nothing in value.
Some things the government does doesn't have to be profitable, it does them because it is a good thing for a government to do.
The government serves the people. A high value opportunity hasn't been slow payments. Poor tax code is way more expensive than anything else.
Eh, merchants have long been complaining about the squeeze from the credit card networks, which routinely raise percentage fees. And merchants have to raise prices for all consumers to keep up.
A fast, free alternative to those would certainly provide some relief.
A fast, free alternative to those would certainly provide some relief.
Cards do not compete with ACH or FedNow. Cards are intentionally reversible and non-final. They serve a different need and use case.
People want insurance products, they want rewards, they want chargebacks and they want to borrow up front - and so do merchants. It increases average ticket sizes and it saves them from having to deal with cash. This system didn't get foisted on anyone, it was built to meet the needs of both buyers and sellers.
In Europe where interchange is regulated, credit cards are capped at 0.3% interchange but don't come with those features.
People want insurance products, they want rewards, they want chargebacks and they want to borrow up front - and so do merchants. It increases average ticket sizes and it saves them from having to deal with cash. This system didn't get foisted on anyone, it was built to meet the needs of both buyers and sellers.
In Europe where interchange is regulated, credit cards are capped at 0.3% interchange but don't come with those features.
ACH is reversible and non-final.
It is kind of interesting how some cryptocurrencies like Solana or Stellar could in theory outcompete PayPal, Visa, MasterCard on fees but the volatility of the underlying cryptocurrency makes them uninteresting for businesses.
What about stablecoins? I think USDC exists on Stellar as well
The government serves the government. "The people" only matter towards that end.
The govt serves the people, but if there are corporations that can manipulate the people to think in their interests, they can get the govt to serve them.
There is no higher authority than that of a sovereign. The government is a sovereign entity which forces use of its currency and taxation upon its subjects in order to compel the procurement of goods and services for its courts, military, and police forces from which it derives actual power. More info in Debt: The First 5,000 Years https://www.amazon.com/Debt-First-5-000-Years/dp/1612191290
There is a higher authority than that actually, those with the government issued money that not even the government has any control over. After all even the government has to obey the rules of its own currency which is why it is perpetually in debt vs the private sector which is mostly controlled by the rich.
If that manipulation runs contrary to the interests of the government, that corporation and its leadership are in for a bad day.
Imagine a world where Zuckerberg wasn't obviously some kind of early Boston Dynamics prototype assembled before the team responsible for the ethics subroutines got their CI/CD going.
When the FBI shows up and tells him to do something, he's going to do it. He can either enjoy the billionaire lifestyle and do as he's told, or suffer the rather predictable consequences. After all, there are well over five thousand federal crimes in the USC. Zuckerberg, along with everybody reading this, is definitely guilty of something. Just takes a bit of digging to figure out what.
Doesn't matter how much money you have or how great your lawyers are. If the government wants to squash you, they are going to squash you.
Imagine a world where Zuckerberg wasn't obviously some kind of early Boston Dynamics prototype assembled before the team responsible for the ethics subroutines got their CI/CD going.
When the FBI shows up and tells him to do something, he's going to do it. He can either enjoy the billionaire lifestyle and do as he's told, or suffer the rather predictable consequences. After all, there are well over five thousand federal crimes in the USC. Zuckerberg, along with everybody reading this, is definitely guilty of something. Just takes a bit of digging to figure out what.
Doesn't matter how much money you have or how great your lawyers are. If the government wants to squash you, they are going to squash you.
"The interests of the government" are not only malleable, but become highly ductile in the presence of large sums of money. Sure, at time T, the government may have decided that gazillionaire Zuck Markerberg may need to be taken down, but at time T', the government may have changed its mind (for reasons we can guess but likely never know).
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Because this is literally about managing the relationship between individual citizens and the government. Why would you want a private entity serving as an intermediary?
It’s great to have organizations that help people navigate complex bureaucracy, but it’s way better to just simplify the bureaucracy directly.
It’s great to have organizations that help people navigate complex bureaucracy, but it’s way better to just simplify the bureaucracy directly.
$15 Million to “study”… “how they would implement it”
How should I say it, “come on man”?
How should I say it, “come on man”?
Hey, I don't disagree government spending numbers can be crazy, but building a system for 330,000,000 people across 50 states that works flawlessly (and is responsible for trillions of dollars) isn't easy. I'm personally okay with $15M... that's like salaries for 25 people for two years.
To put that number into perspective, TurboTax spent about that much money on lobbying alone from 2018-2012.
To put that number into perspective, TurboTax spent about that much money on lobbying alone from 2018-2012.
>but building a system for 330,000,000 people across 50 states that works flawlessly (and is responsible for trillions of dollars) isn't easy.
You seem to be assuming they’ll succeed.
I don’t think the government could do that for $15 Trillion, never the less $15 Million.
You seem to be assuming they’ll succeed.
I don’t think the government could do that for $15 Trillion, never the less $15 Million.
ACH works right now, there's no reason to think the replacement wouldn't work.
For the record, ACH is incredibly cheap ($0.002 to send and $0.001 to receive) - but with the volumes of payments going through the network, that $15M is a small fraction of revenue. There was no special tax measure passed to fund this study. It came out of user fees.
> More than 29 billion ACH Network payments were made in 2021, valued at close to $73 trillion.
For the record, ACH is incredibly cheap ($0.002 to send and $0.001 to receive) - but with the volumes of payments going through the network, that $15M is a small fraction of revenue. There was no special tax measure passed to fund this study. It came out of user fees.
> More than 29 billion ACH Network payments were made in 2021, valued at close to $73 trillion.
> For the record, ACH is incredibly cheap ($0.002 to send and $0.001 to receive)
Wow!
What's the API look like?
Wow!
What's the API look like?
> What's the API look like?
Bad. lol. But let's see what comes out of FedNow.
Bad. lol. But let's see what comes out of FedNow.
15M for tax filing system, not ACH.
It needs to work for all people stuck paying US tax, which also includes people outside of those 50 states.
> building a system for 330,000,000 people across 50 states that works flawlessly (and is responsible for trillions of dollars) isn't easy
Which is why they should pay real experts to do it. For less.
Which is why they should pay real experts to do it. For less.
If I were an expert and the government came to me and my team with this project, I'd definitely charge at least $15M.
What do you think has been spent on developing Blockchain/DLT from 2007 to present? Is it more than $15m? Mostly amateur open source or corporate open source contributions?
- Bitcoin has an MIT License, for example
- XRPL and Stellar can do the payments volume; the TPS report; whereas otherwise you're building another Layer 2 system without Interledger.
- Flare does EVM (Ethereum Virtual Machine) Smart Contracts with XRPL; $<0.01/tx, network tx fees are just burned, 5 second transaction/ledger close time.
Notes re: Interledger addresses, SPSP, WebMonetization: https://westurner.github.io/hnlog/#comment-32515531 ,
> From "NIST Special Publication 800-181 Revision 1: Workforce Framework for Cybersecurity (NICE Framework)" (2020) https://doi.org/10.6028/NIST.SP.800-181r1 :
>> 3.1 Using Existing Task, Knowledge, and Skill (TKS) Statements
> (Edit) FedNOW should - like mCBDC - really consider implementing Interledger Protocol (ILP) for RTGS "Real-Time Gross Settlement" https://interledger.org/developer-tools/get-started/overview...
> From https://interledger.org/rfcs/0032-peering-clearing-settlemen... :
> Peering, Clearing and Settling; The Interledger network is a graph of nodes (connectors) that have peered with one another by establishing a means of exchanging ILP packets and a means of paying one another for the successful forwarding and delivery of the packets.
> […] Accounts and Balances: The edge between any two nodes (peers) is a communication link (for exchanging ILP packets and other data), and an account held between the peers (the Interledger account). The Interledger account has a balance denominated in a mutually agreed upon asset (e.g. USD) at an agreed upon scale (e.g. 2). The balance on the account is the net total of the amounts on any packets “successfully” routed between the peers.
> The balance on the Interledger account can only change as a result of two events:
> 1. The “successful” routing of an ILP packet between the two peers
> 2. A payment made between the peers on the underlying payment network they have agreed to use to settle the Interledger account
And then you realize you're sharing payment address information over a different but comparably-unsecured channel in a non-stanfardized way; From https://github.com/interledger/rfcs/blob/master/0009-simple-... :
> Relation to Other Protocols: SPSP is used for exchanging connection information before an ILP payment or data transfer is initiated
To do a complete business process, there's – e.g. TradeLens, GSBN, and – signaling around transactions, which then necessarily depends upon another - hopefully also cryptographically-secured and HA Highly Available - information system with API version(s) and database schema(s) unless there's something like Interledger SPSP Simple Payment Setup Protocol and Payment Pointers, which also solve for micropayments to accountably support creators; https://WebMonetization.org/ .
- Bitcoin has an MIT License, for example
- XRPL and Stellar can do the payments volume; the TPS report; whereas otherwise you're building another Layer 2 system without Interledger.
- Flare does EVM (Ethereum Virtual Machine) Smart Contracts with XRPL; $<0.01/tx, network tx fees are just burned, 5 second transaction/ledger close time.
Notes re: Interledger addresses, SPSP, WebMonetization: https://westurner.github.io/hnlog/#comment-32515531 ,
> From "NIST Special Publication 800-181 Revision 1: Workforce Framework for Cybersecurity (NICE Framework)" (2020) https://doi.org/10.6028/NIST.SP.800-181r1 :
>> 3.1 Using Existing Task, Knowledge, and Skill (TKS) Statements
> (Edit) FedNOW should - like mCBDC - really consider implementing Interledger Protocol (ILP) for RTGS "Real-Time Gross Settlement" https://interledger.org/developer-tools/get-started/overview...
> From https://interledger.org/rfcs/0032-peering-clearing-settlemen... :
> Peering, Clearing and Settling; The Interledger network is a graph of nodes (connectors) that have peered with one another by establishing a means of exchanging ILP packets and a means of paying one another for the successful forwarding and delivery of the packets.
> […] Accounts and Balances: The edge between any two nodes (peers) is a communication link (for exchanging ILP packets and other data), and an account held between the peers (the Interledger account). The Interledger account has a balance denominated in a mutually agreed upon asset (e.g. USD) at an agreed upon scale (e.g. 2). The balance on the account is the net total of the amounts on any packets “successfully” routed between the peers.
> The balance on the Interledger account can only change as a result of two events:
> 1. The “successful” routing of an ILP packet between the two peers
> 2. A payment made between the peers on the underlying payment network they have agreed to use to settle the Interledger account
And then you realize you're sharing payment address information over a different but comparably-unsecured channel in a non-stanfardized way; From https://github.com/interledger/rfcs/blob/master/0009-simple-... :
> Relation to Other Protocols: SPSP is used for exchanging connection information before an ILP payment or data transfer is initiated
To do a complete business process, there's – e.g. TradeLens, GSBN, and – signaling around transactions, which then necessarily depends upon another - hopefully also cryptographically-secured and HA Highly Available - information system with API version(s) and database schema(s) unless there's something like Interledger SPSP Simple Payment Setup Protocol and Payment Pointers, which also solve for micropayments to accountably support creators; https://WebMonetization.org/ .
> What do you think has been spent on developing Blockchain/DLT from 2007 to present? Is it more than $15m? Mostly amateur open source or corporate open source contributions?
Are you kidding me? Hundreds of billions. a16z's last fund alone as $4.6B.
That money goes directly to developers.
Are you kidding me? Hundreds of billions. a16z's last fund alone as $4.6B.
That money goes directly to developers.
What percentage (%) of the market cap, daily volume, or price gets contributed to, OTOH: (a) open source software development like code, tests, and docs; PRs: Pull Requests; (b) free information security review such as static and dynamic analysis; (c) marketing; (d) an open source software foundation; (e) offsetting long-term environmental costs through sustainable investment?
Are there other metrics for Software Quality & Infosec Assurances?
Are there other metrics for Software Quality & Infosec Assurances?
Honestly none of that is relevant.
The entirety of the investment made by VCs is given directly to developers. That's got nothing to do with daily volume, market cap, etc - that's cash in hand. Human dollars. What developers choose to spend that money on is up to them but they sure do seem to have found a way. Arbitrarily constraining the analysis to the 'free' part is disingenuous.
As for offsets, the entire model is bogus and I encourage you to look into it. It's generally just a way to prop up bad business models. You can't buy crime offsets from someone who promises not to do a crime they would have otherwise so that you can do it - and yet that's exactly how carbon offsetting works. That's to say nothing of that blockchain carbon offsetting company that set fire to the forest they were planting twice. [1]
[1] https://boingboing.net/2022/07/23/blockchain-based-carbon-of...
The entirety of the investment made by VCs is given directly to developers. That's got nothing to do with daily volume, market cap, etc - that's cash in hand. Human dollars. What developers choose to spend that money on is up to them but they sure do seem to have found a way. Arbitrarily constraining the analysis to the 'free' part is disingenuous.
As for offsets, the entire model is bogus and I encourage you to look into it. It's generally just a way to prop up bad business models. You can't buy crime offsets from someone who promises not to do a crime they would have otherwise so that you can do it - and yet that's exactly how carbon offsetting works. That's to say nothing of that blockchain carbon offsetting company that set fire to the forest they were planting twice. [1]
[1] https://boingboing.net/2022/07/23/blockchain-based-carbon-of...
In your opinion, high quality Open Source Software is the result of VC money?
Chainslysis sells Blockchain/DLT analysis and investigation software and services to investigative agencies in multiple countries: https://en.wikipedia.org/wiki/Chainalysis
How do they estimate their potential market?
"Crypto Crime Trends for 2022: Illicit Transaction Activity Reaches All-Time High in Value, All-Time Low in Share of All Cryptocurrency Activity" https://blog.chainalysis.com/reports/2022-crypto-crime-repor...
> In fact, with the growth of legitimate cryptocurrency usage far outpacing the growth of criminal usage, illicit activity’s share of cryptocurrency transaction volume has never been lower.
> […] Transactions involving illicit addresses represented just 0.15% of cryptocurrency transaction volume in 2021 despite the raw value of illicit transaction volume reaching its highest level ever. As always, we have to caveat this figure and say that it is likely to rise as Chainalysis identifies more addresses associated with illicit activity and incorporates their transaction activity into our historical volumes. For instance, we found in our last Crypto Crime Report that 0.34% of 2020’s cryptocurrency transaction volume was associated with illicit activity — we’ve now raised that figure to 0.62%. Still, the yearly trends suggest that with the exception of 2019 — an extreme outlier year for cryptocurrency-based crime largely due to the […] scheme — crime is becoming a smaller and smaller part of the cryptocurrency ecosystem. Law enforcement’s ability to combat cryptocurrency-based crime is also evolving. We’ve seen several examples of this throughout 2021, […]
> However, we also have to balance the positives of the growth of legal cryptocurrency usage with the understanding that $14 billion worth of illicit activity represents a significant problem. Criminal abuse of cryptocurrency creates huge impediments for continued adoption, heightens the likelihood of restrictions being imposed by governments, and worst of all victimizes innocent people around the world. In this report, we’ll explain exactly how and where cryptocurrency-based crime increased, dive into the latest trends amongst different types of cybercriminals, and tell you how cryptocurrency businesses and law enforcement agencies around the world are responding. But first, let’s look at a few of the key trends in cryptocurrency-based crime […]
"Mid-year Crypto Crime Update: Illicit Activity Falls With Rest of Market, With Some Notable Exceptions" (August 2022) https://blog.chainalysis.com/reports/crypto-crime-midyear-up...
More concerned about the climate impact; about environmental sustainability: https://cryptoclimate.org/supporters/
And still, 99%+ of the market is incapable of assessing the software quality of the platforms underpinning the assets themselves, so we reach for some sort of market fundamentals technical data other than software quality and information security asurances.
Chainslysis sells Blockchain/DLT analysis and investigation software and services to investigative agencies in multiple countries: https://en.wikipedia.org/wiki/Chainalysis
How do they estimate their potential market?
"Crypto Crime Trends for 2022: Illicit Transaction Activity Reaches All-Time High in Value, All-Time Low in Share of All Cryptocurrency Activity" https://blog.chainalysis.com/reports/2022-crypto-crime-repor...
> In fact, with the growth of legitimate cryptocurrency usage far outpacing the growth of criminal usage, illicit activity’s share of cryptocurrency transaction volume has never been lower.
> […] Transactions involving illicit addresses represented just 0.15% of cryptocurrency transaction volume in 2021 despite the raw value of illicit transaction volume reaching its highest level ever. As always, we have to caveat this figure and say that it is likely to rise as Chainalysis identifies more addresses associated with illicit activity and incorporates their transaction activity into our historical volumes. For instance, we found in our last Crypto Crime Report that 0.34% of 2020’s cryptocurrency transaction volume was associated with illicit activity — we’ve now raised that figure to 0.62%. Still, the yearly trends suggest that with the exception of 2019 — an extreme outlier year for cryptocurrency-based crime largely due to the […] scheme — crime is becoming a smaller and smaller part of the cryptocurrency ecosystem. Law enforcement’s ability to combat cryptocurrency-based crime is also evolving. We’ve seen several examples of this throughout 2021, […]
> However, we also have to balance the positives of the growth of legal cryptocurrency usage with the understanding that $14 billion worth of illicit activity represents a significant problem. Criminal abuse of cryptocurrency creates huge impediments for continued adoption, heightens the likelihood of restrictions being imposed by governments, and worst of all victimizes innocent people around the world. In this report, we’ll explain exactly how and where cryptocurrency-based crime increased, dive into the latest trends amongst different types of cybercriminals, and tell you how cryptocurrency businesses and law enforcement agencies around the world are responding. But first, let’s look at a few of the key trends in cryptocurrency-based crime […]
"Mid-year Crypto Crime Update: Illicit Activity Falls With Rest of Market, With Some Notable Exceptions" (August 2022) https://blog.chainalysis.com/reports/crypto-crime-midyear-up...
More concerned about the climate impact; about environmental sustainability: https://cryptoclimate.org/supporters/
And still, 99%+ of the market is incapable of assessing the software quality of the platforms underpinning the assets themselves, so we reach for some sort of market fundamentals technical data other than software quality and information security asurances.
My local county government is spending $25 million on a Salesforce database setup/migration. I think 15m is okay.
[deleted]
Yikes, that's atrocious
The IRS has been underfunded and understaffed and demonized for a couple of decades. They've been strictly not allowed nor funded to develop online or automatic tax filing for awhile now, largely in part due to lobbying from intuit, H&R block, etc. I've worked in tax for a few years now, and that's basically the simplified overview of the situation.
The IRS does not need to be a large operation. It's a problem created by our complex tax code, something every politician ever has promised to fix, and yet here we are. I for one would rather see the root issue solved. The primary role of the IRS can be done with a handful of agents and computers. They do not need to be a law enforcement agency. They do not need to have guns. They do not need to be yet another arm of federal and executive overreach and power expansion.
The politicians that have said this are either liars or fools or both. The US government has for more than a century chosen to use the tax code as a policy tool, by providing taxes, tax credits and deductions to encourage and discourage behavior of its choosing. Contrast with the situation in many other countries where the government just simply reimburses people who engage in the desirable behavior. No single politician will ever be able to reverse this approach to entangling policy and taxation.
And yes, they are enforcing laws. If they do not, then some other agency with similar or more expansive police powers will need to do the same thing.
And yes, they are enforcing laws. If they do not, then some other agency with similar or more expansive police powers will need to do the same thing.
America has always had people who engaged in wishful thinking about funding government. Indeed that's why the United States even exists in its current form. After achieving independence all the colonists were very clear that they should just voluntarily pay to run stuff, it's obvious right? No need for a central government to take money, we will gladly give it.
But of course these good intentions last only five minutes. No, we don't have any money for Central government this year, the harvest was poor and besides we needed money for our new great hall. We'll get you next time. And like that old friend who always seems to have forgotten their wallet, the colonists never did seem to have the money they'd said they'd give voluntarily.
So the Constitution establishes a government which can take what it needs, because the wishful thinking doesn't work.
But of course these good intentions last only five minutes. No, we don't have any money for Central government this year, the harvest was poor and besides we needed money for our new great hall. We'll get you next time. And like that old friend who always seems to have forgotten their wallet, the colonists never did seem to have the money they'd said they'd give voluntarily.
So the Constitution establishes a government which can take what it needs, because the wishful thinking doesn't work.
I fully agree, a negative income tax model that is similar to a UBI would minimize the bureaucracy of income taxes while simultaneously reducing the need for ultra specific means tested benefits programs.
There is hardly any bureaucracy around income taxes. As a sibling post mentions, it's the insistence on legislating through the tax code (via deductions and credits) that makes the IRS' job incredibly complicated.
IRS has frequently been used as a tool to go after political opponents.
Or some people try to politicize their tax dodging when they get caught.
> > IRS has frequently been used as a tool to go after political opponents.
> Or some people try to politicize their tax dodging when they get caught.
I don't see why that has to be an "or." the statements are not mutually exclusive (i.e. they can both be simultaneously true)
> Or some people try to politicize their tax dodging when they get caught.
I don't see why that has to be an "or." the statements are not mutually exclusive (i.e. they can both be simultaneously true)
I don’t see why that has to be read as an ‘xor’.
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To the downvoters: https://en.wikipedia.org/wiki/IRS_targeting_controversy
and Historically: https://en.wikipedia.org/wiki/List_of_allegations_of_misuse_...
and Historically: https://en.wikipedia.org/wiki/List_of_allegations_of_misuse_...
Nothing in either of those links remotely substantiates "frequently been used as a tool to go after political opponents". It's just a list of allegations. A bunch of people and organizations (from, it seems, all across the political spectrum) got audited, that's it? Did the audits... find mistakes in their taxes?
For those here who are young and haven't had an exposure to this process outside of meme sites: an IRS audit is indeed a big pain in the ass. But as political oppression, it's pretty weak sauce. It's not like we're deploying novichok in the service of tax collection.
For those here who are young and haven't had an exposure to this process outside of meme sites: an IRS audit is indeed a big pain in the ass. But as political oppression, it's pretty weak sauce. It's not like we're deploying novichok in the service of tax collection.
They weren't even tax audits in the 'targeting scandal' - 501C4 groups are required to be non-partisan. In the wake of Citizens United, tons of new C4s sprung up and the IRS was required to vet them to make sure they were actually non-partisan. So they started trying to filter that list down from every new org, to those that would likely be partisan.. e.g. those with "tea party" in the name or "progressive" or "occupy".
Through just relentless bad faith and a bottomless victim complex, the Republican House committees spent years insisting that Obama was targeting them, by literally restricting the IRS audit to only the right leaning lists and then presenting the IG results as comprehensive: https://thehill.com/policy/finance/154584-ig-audit-of-irs-ac...
Through just relentless bad faith and a bottomless victim complex, the Republican House committees spent years insisting that Obama was targeting them, by literally restricting the IRS audit to only the right leaning lists and then presenting the IG results as comprehensive: https://thehill.com/policy/finance/154584-ig-audit-of-irs-ac...
As mentioned in your first example, they didn't go after opponents at all, unless you mean they went after both groups who would be considered opponents of each other. It was a great big fake news fiasco.
This is true and does not deserve to be downvoted
First you cut the budget for decades, then you complain why the agency needs more money to do the job they should have been doing decades ago.
> I'm starting to feel more hopeful about the US's digital infrastructure.
The real American way is to have no government involvement. Arguably no federal reserve.
Banks already created Zelle which works great. Get cash instantly with a phone number. I personally prefer cash but w.e. (Don’t want to be tracked)
Why do I need the government implementing another solution that already exists. Particularly one that has partisan actors at the top of the board. No thanks.
The real American way is to have no government involvement. Arguably no federal reserve.
Banks already created Zelle which works great. Get cash instantly with a phone number. I personally prefer cash but w.e. (Don’t want to be tracked)
Why do I need the government implementing another solution that already exists. Particularly one that has partisan actors at the top of the board. No thanks.
Are you equating Zelle to Faster Payments? No offense, but I really don't think you know enough about payments clearing if you are making such a statement.
Lol having spent 7 years at a major bank in the R&D space, I know quite a bit.
It really depends what you mean about payment clearing. With Zelle you can send someone money in a few seconds. I’ve done transactions up to a couple thousand.
That said it doesn’t “clear” immediately if that’s what you mean. Typically, I can use the funds within 3-5 min, so idk seems pretty darn fast.
It really depends what you mean about payment clearing. With Zelle you can send someone money in a few seconds. I’ve done transactions up to a couple thousand.
That said it doesn’t “clear” immediately if that’s what you mean. Typically, I can use the funds within 3-5 min, so idk seems pretty darn fast.
This seems a reasonable summary and FedNow is stated as being faster to settle than Zelle. https://www.paymentsjournal.com/the-distinctions-between-fas...
Ok but please read up on FedNow so you remain an expert.
[deleted]
Here is why: I still have people I can't send Zelle payments to because they bank with some random credit union. I can ACH anyone. ACH is managed through the "partisan" Federal Reserve.
Also, not sure if you're aware of the irony of your statement on no government involvement. Zelle originated at Bank of America, JP Morgan Chase, and Wells Fargo in 2011. Three of the largest recipients of bailout funds after the 2008 financial crisis. So, technically, Zelle wouldn't exist without government involvement.
Also, not sure if you're aware of the irony of your statement on no government involvement. Zelle originated at Bank of America, JP Morgan Chase, and Wells Fargo in 2011. Three of the largest recipients of bailout funds after the 2008 financial crisis. So, technically, Zelle wouldn't exist without government involvement.
> irony of your statement on no government involvement. Zelle originated at Bank of America, JP Morgan Chase, and Wells Fargo in 2011. Three of the largest recipients of bailout funds after the 2008 financial crisis. So, technically, Zelle wouldn't exist without government involvement.
I agree with you Zelle might not exist without government involvement in saving some of the banks involved. That doesn’t mean the government was involved in developing or managing Zelle.
That’d be like saying Tesla is government run because it gets a tax break per vehicle. You could argue Tesla wouldn’t exist without it (probably true), but it doesn’t mean government manages anything
I agree with you Zelle might not exist without government involvement in saving some of the banks involved. That doesn’t mean the government was involved in developing or managing Zelle.
That’d be like saying Tesla is government run because it gets a tax break per vehicle. You could argue Tesla wouldn’t exist without it (probably true), but it doesn’t mean government manages anything
The real american way is to add layers of inefficient private middlemen to barely solve problems that were done efficiently in giant majority of different countries, while paying 2x-10x for it. Healthcare, taxes, payments.
> The U.S. Faster Payments Council (FPC) is an industry-led membership organization established so Americans can safely and securely pay anyone, anywhere, at any time and with near-immediate funds availability. [0]
> The FedNow Service is a new instant payment service that the Federal Reserve Banks are developing to enable financial institutions of every size, and in every community across the U.S., to provide safe and efficient instant payment services in real time, around the clock, every day of the year. [1]
for context in case not everyone knows what "Faster Payments Systems" is (or that it's the actual name of the system, apparently).
[0] https://fasterpaymentscouncil.org/
[1] https://www.frbservices.org/financial-services/fednow/about....
> The FedNow Service is a new instant payment service that the Federal Reserve Banks are developing to enable financial institutions of every size, and in every community across the U.S., to provide safe and efficient instant payment services in real time, around the clock, every day of the year. [1]
for context in case not everyone knows what "Faster Payments Systems" is (or that it's the actual name of the system, apparently).
[0] https://fasterpaymentscouncil.org/
[1] https://www.frbservices.org/financial-services/fednow/about....
That's the UK one, the Faster Payments Service. In the US it's called FedNow. [1]
[1] https://www.frbservices.org/financial-services/fednow/prepar...
[1] https://www.frbservices.org/financial-services/fednow/prepar...
Got it in the edit, thanks!
Yeah the capitalization in the article title is all wrong so it was hardly your fault. This article doesn't even call it by its proper name. They even refer to the competing service as "The Clearing House" - it's not, it's RTP [1] - that's the name of the company that runs it.
Surprisingly FedNow [2] is barely mentioned on Wikipedia. [3]
This is probably a better article to have linked for the post. [4]
[1] https://www.theclearinghouse.org/payment-systems/rtp
[2] https://www.frbservices.org/financial-services/fednow
[3] https://en.wikipedia.org/wiki/FedACH
[4] https://www.pymnts.com/news/payment-methods/2022/fednow-pilo...
Surprisingly FedNow [2] is barely mentioned on Wikipedia. [3]
This is probably a better article to have linked for the post. [4]
[1] https://www.theclearinghouse.org/payment-systems/rtp
[2] https://www.frbservices.org/financial-services/fednow
[3] https://en.wikipedia.org/wiki/FedACH
[4] https://www.pymnts.com/news/payment-methods/2022/fednow-pilo...
Even Cambodia has instant bank transfers already figured out. I can basically walk around with just my keys and phone and pay for anything I need from groceries to taxis to bar tabs to school fees. Even the local market sellers use it.
It's not actually a technical challenge, more of a regulatory one. Small countries can achieve fast transactions by not having any compliance rules.
While that may be the true in the cases of very small countries, on the other hand, Europe generally has even stricter regulations than the US and it also has better payment systems, so I'm not sure that the problem with the US taking so long to achieve this is necessarily due to having more regulations than other countries.
The US also has recently seems to have a hesitance toward introducing new regulations that actually seems to have made it harder to change things like these in cases where the private sector isn't able to take the initiative on its own.
The US also has recently seems to have a hesitance toward introducing new regulations that actually seems to have made it harder to change things like these in cases where the private sector isn't able to take the initiative on its own.
UPI exists in India. And m-Pesa in Kenya. Neither are small countries or lightly regulated. At this point, US digital infrastructure is just objectively behind everyone else.
It absolutely is a technical challenge, and all of the above: risk, compliance, regulatory, technical. Small countries can achieve fast transactions because their risk is lower, their complexity is lower, their compliance burden is lower, and their technical burden is lower, because they are...smaller.
The migration to ISO 20022 is in full swing, finally. We will get there.
The migration to ISO 20022 is in full swing, finally. We will get there.
I mean yeah that's true. I guess I meant it's not a technical challenge to just transfer money quickly, but it definitely is a technical challenge to transfer money quickly in compliance with US regulations. And sure other countries have figured it out which is likely a function of more efficient bureaucracy and/or more lax compliance rules as opposed to not having smart enough technologists.
I think a robust transaction processing system, which can scale and handle as many transactions as you can imagine, complying with regulations while not having any single points of failure does count as a technical challenge. I don't think this sort of database is allowed to ever go down.
It's gone down 1 time for less than 1 day in 3 years since I've been using it. That was quite a day.
Or just having far fewer banks that need to be involved, instead of the roughly 5k we have in the US.
The US has so many banks thanks to some earlier misguided regulation:
In large parts of the US, it used to be illegal for banks to have branches.
As you can guess, keeping your banks confined to one office in one city is a recipe for them being vulnerable to the fortunes of a single small area.
In contrast, their neighbour to the north, Canada, had a much more stable banking system, that was run by large national chains (just like in most other parts of the developed world).
If you want to learn more, George Selgin has written a lot on the topic. Other keywords to look for are 'unit banking' vs 'branch banking'.
In large parts of the US, it used to be illegal for banks to have branches.
As you can guess, keeping your banks confined to one office in one city is a recipe for them being vulnerable to the fortunes of a single small area.
In contrast, their neighbour to the north, Canada, had a much more stable banking system, that was run by large national chains (just like in most other parts of the developed world).
If you want to learn more, George Selgin has written a lot on the topic. Other keywords to look for are 'unit banking' vs 'branch banking'.
I'm from Canada. Our banking system is stable, but expensive and not very competitive.
I'm mostly familiar with more historic periods. See https://www.alt-m.org/2015/07/29/there-was-no-place-like-can... for some background that you might find interesting.
Changing from a clearinghouse net once a day settlement to real time gross settlement is a huge change especially if you are a small bank running ancient software.
Being a massive bank with ancient software is worse in many ways
The UK launched its Faster Payments network in 2008
I remember at the time hearing stories of legacy systems that were in a dreadful state and in one case still using microfiche as part of the day to day processing.
I know some time has passed since and a lot of money and effort has been spent in improving things but I'm still pretty impressed just how quick it all works. My banking app notifies me when money is sent or received from my account and it usually beats the checkout confirmation page load time or POS approved message when I make a purchase.
I know some time has passed since and a lot of money and effort has been spent in improving things but I'm still pretty impressed just how quick it all works. My banking app notifies me when money is sent or received from my account and it usually beats the checkout confirmation page load time or POS approved message when I make a purchase.
[deleted]
Cambodia also has very simple financial systems and a lot of fraud
> The Fed’s new payments system will compete with privately-held The Clearing House, which was launched by a consortium of large banks in 2017. It processed 41.2 million transactions valued at about US$18 billion in the second quarter.
For someone like me who only uses Zelle and Venmo, haven't needed others - I wonder if this will make a difference and also when exactly will this private vs Fed gateway make a difference. Would there be any fees? I know private exchange came first but if Fed solution is free or cheaper, would they need to maintain the alternative?
For someone like me who only uses Zelle and Venmo, haven't needed others - I wonder if this will make a difference and also when exactly will this private vs Fed gateway make a difference. Would there be any fees? I know private exchange came first but if Fed solution is free or cheaper, would they need to maintain the alternative?
Transfers within Venmo fake immediacy. If it depends on an ACH transfer (ie the money is coming from a bank account and not an existing Venmo balance) then the money will be taken back if the ACH fails.
It's transfers between Venmo and a bank that would get faster.
It's transfers between Venmo and a bank that would get faster.
There‘s nothing fake about a bank or payment service provider giving you access to unsettled funds if they can be reasonably sure that they will ultimately be made whole.
Banks are required to make the first $200 or so of a deposited check available immediately, and at that point it‘s not even clear if the check will clear, much less has the money already settled.
What‘s important to have in real time is a payment guarantee, but of course it helps the receiving institution with liquidity management if the settlement itself is also instantaneous.
Banks are required to make the first $200 or so of a deposited check available immediately, and at that point it‘s not even clear if the check will clear, much less has the money already settled.
What‘s important to have in real time is a payment guarantee, but of course it helps the receiving institution with liquidity management if the settlement itself is also instantaneous.
Normal bank transfers can also be reversed, if something goes wrong, can't they? (Eg if there's fraud or whatever?)
That's correct. ACH bank transfers can typically be reversed within 60 days, and even beyond that in some exceptional circumstances.
Does Zelle use ACH? My understanding is that Zelle transfers are permanent. (But then I thought that about Venmo.)
There are stories of Venmo transfers that do not include ACH (ie the source of funds is a venmo balance) being difficult or impossible to reverse. That's purely a product choice by Paypal.
The problem with Zelle is that you can only link it with one bank account. So if I need someone to Zelle my Last Coastal Credit Union account, I have to unassociate Zelle from Landfill Bank. Not ideal.
I’m hoping the Fed solution fixes this.
I’m hoping the Fed solution fixes this.
I have three bank accounts and it's difficult using Zelle. I use a different email with two, and a phone number with the other one. But sometimes I forget which account belongs to which email. It's idiotic.
use [email protected].
There's enough horror stories about Google and gmail to not trust them with something so important.
You could do the same thing with a different email provider.
That's one problem with Zelle.
Another is that if you live overseas it is really hard to get it to work, even with a pre-existing US bank account.
And you can't make Zelle payments to someone who is not on Zelle. While in theory that's also true for ACH, bank wire transfers have been a thing basically since the invention of wires (telegraph).
Sorry, in my experience Zelle is a major step backwards with severe loss of functionality and greatly increased risk exposure.
Another is that if you live overseas it is really hard to get it to work, even with a pre-existing US bank account.
And you can't make Zelle payments to someone who is not on Zelle. While in theory that's also true for ACH, bank wire transfers have been a thing basically since the invention of wires (telegraph).
Sorry, in my experience Zelle is a major step backwards with severe loss of functionality and greatly increased risk exposure.
zelle uses email or phone as identity. So you can create as many zelle accounts as bank accounts with email aliases.
It will make Venmo/Zelle obsolete as banks will offer fast transfers natively. So no need for another app just for transferring money.
However Venmo does have a nicer UX so customers will likely stick around since its “fun”.
However Venmo does have a nicer UX so customers will likely stick around since its “fun”.
My credit union is integrated with Zelle. I had to go through a special process to do straight ACH transfers, they kept wanting to direct me to Zelle but I need to regularly do transfers beyond the Zelle limit (business payments).
If this all works it will be an interesting culture shift.
If this all works it will be an interesting culture shift.
Yes, because "transferring money" is a CORE BUSINESS FUNCTION of banks!
Major step backwards for them to outsource this. Your absolutely right that you should not need another app or service to enable your bank to do its job.
Major step backwards for them to outsource this. Your absolutely right that you should not need another app or service to enable your bank to do its job.
The biggest annoyance with Venmo is taking your money out takes a couple of days.
Perhaps Venmo ends up using this to change that and move the money but I'd prefer to skip the middle man and transfer through the fed's service over pay pal's.
Perhaps Venmo ends up using this to change that and move the money but I'd prefer to skip the middle man and transfer through the fed's service over pay pal's.
Zelle and Venmo are difficult to reverse and filled with scammers. This is one of the reasons why paying large sums of money or digitally isn't easy. Will this be any better?
hammock(4)
Yeah, I don't really know why the US needs a government-run payment system (that will enjoy numerous implicit subsidies and regulatory advantages), when the private sector can handle this.
What's next, government grocery stores or shoe factories?
What's next, government grocery stores or shoe factories?
Eru has a decent HN reputation, so I'll engage.
First, the private sector is not handling this well.
Second, we are talking about core infrastructure of society. The question of what is best to solve this, business or government, is indeed complex.
Business tends to work well when the value created is short-term and can be easily measured and captured by the entity creating that value. For example, a grocery store.
Government tends to work well when the value created is long-term and diffuse, and doesn't have a single point of capture. For example, the road network which the grocery store relies on to get both its goods and its clients to the store.
A nation-wide payments system seems to me to fall clearly into the second category.
Note that eru is from Singapore, truly a great country where the government has many examples of striking a good balance along the above lines. It isn't perfect, but it is one of the best in the world.
First, the private sector is not handling this well.
Second, we are talking about core infrastructure of society. The question of what is best to solve this, business or government, is indeed complex.
Business tends to work well when the value created is short-term and can be easily measured and captured by the entity creating that value. For example, a grocery store.
Government tends to work well when the value created is long-term and diffuse, and doesn't have a single point of capture. For example, the road network which the grocery store relies on to get both its goods and its clients to the store.
A nation-wide payments system seems to me to fall clearly into the second category.
Note that eru is from Singapore, truly a great country where the government has many examples of striking a good balance along the above lines. It isn't perfect, but it is one of the best in the world.
I'm actually from (East) Germany, but I moved to Singapore exactly because of the advantages you mentioned. Putting my tax-money where my mouth is, so to speak. And I have to say I am happy with the value-for-tax-money I am getting here.
If the private sector in your country can't handle infrastructure, I think the role of government should be to clean up regulatory hurdles and barriers to entry, so that the private sector can handle this task.
Honest and competent civil servants are one of the rarest and most precious resource in any country. Affairs should be set up, so as to economize on their time and effort required.
Singapore ain't perfect. For example, our government has significant ownership in eg an airline and quite a few other businesses. But still, Singapore is one of the best run countries for a neoliberal.
> Business tends to work well when the value created is short-term and can be easily measured and captured by the entity creating that value. For example, a grocery store.
I agree. I agree even more: any organisation works best when feedback is immediate.
> Government tends to work well when the value created is long-term and diffuse, and doesn't have a single point of capture. For example, the road network which the grocery store relies on to get both its goods and its clients to the store.
I disagree. We know that governments work badly at the best of times. Why would anyone think they'll magically start working better when the outcomes are harder to measure?
You could try to make an argument that both governments and businesses work badly under these circumstances, but that for some reason governments are slightly less impacted?
I mean, it's theoretically possible. But seems unlikely?
In your specific scenario: toll roads work just fine. Alternatively, the shop can also choose to subsidise road tolls for their customers. Just like shops often offer free parking already, or other freebies.
(And yes, I also think that governments should not be in the business of issuing currency either. At least they shouldn't have a legal monopoly. See eg https://oll.libertyfund.org/title/white-the-theory-of-free-b...
This is a minority position these days, but one with a long intellectual heritage.)
If the private sector in your country can't handle infrastructure, I think the role of government should be to clean up regulatory hurdles and barriers to entry, so that the private sector can handle this task.
Honest and competent civil servants are one of the rarest and most precious resource in any country. Affairs should be set up, so as to economize on their time and effort required.
Singapore ain't perfect. For example, our government has significant ownership in eg an airline and quite a few other businesses. But still, Singapore is one of the best run countries for a neoliberal.
> Business tends to work well when the value created is short-term and can be easily measured and captured by the entity creating that value. For example, a grocery store.
I agree. I agree even more: any organisation works best when feedback is immediate.
> Government tends to work well when the value created is long-term and diffuse, and doesn't have a single point of capture. For example, the road network which the grocery store relies on to get both its goods and its clients to the store.
I disagree. We know that governments work badly at the best of times. Why would anyone think they'll magically start working better when the outcomes are harder to measure?
You could try to make an argument that both governments and businesses work badly under these circumstances, but that for some reason governments are slightly less impacted?
I mean, it's theoretically possible. But seems unlikely?
In your specific scenario: toll roads work just fine. Alternatively, the shop can also choose to subsidise road tolls for their customers. Just like shops often offer free parking already, or other freebies.
(And yes, I also think that governments should not be in the business of issuing currency either. At least they shouldn't have a legal monopoly. See eg https://oll.libertyfund.org/title/white-the-theory-of-free-b...
This is a minority position these days, but one with a long intellectual heritage.)
To expand on the toll road example, I will take the radical position that it is exactly the implicit subsidy of roads and automobiles by the government that has resulted in the nightmarish car-culture of the US -- one which has had myriad externalities, including the destruction of town centers, the concentration of commerce in big-box stores in sprawling suburbs, and an annual number of road deaths that is a full 25% of what COVID has wraught, except for every single year forever. If you are an American, you are forced to pay for this atrocity with your tax dollars.
You might enjoy 'The High Cost of Free Parking'.
See eg https://www.econtalk.org/extra/free-parking/
(Also https://www.econlib.org/archives/2006/02/economics_of_fr.htm... and https://www.econlib.org/archives/2010/08/why_is_there_fr.htm... and https://en.wikipedia.org/wiki/The_High_Cost_of_Free_Parking )
See eg https://www.econtalk.org/extra/free-parking/
(Also https://www.econlib.org/archives/2006/02/economics_of_fr.htm... and https://www.econlib.org/archives/2010/08/why_is_there_fr.htm... and https://en.wikipedia.org/wiki/The_High_Cost_of_Free_Parking )
This is honestly a really good point.
Given the slow pace of the government, I would be okay with government run grocery stores. We would still be a good half a century away from them considering self checkout, so they would still staff human cashiers, which you don't find in private grocers, these days.
Government run grocery stores exist in the US military. There's one on just about every US military base. It's called a commissary and they do have self-checkout. They operate like any other grocery store except there's no sales tax.
Isn't it a scary precedent that the government wants to compete with private enterprise, while publically funded?
Finally, the US is ready to catch up to India in this aspect.
US financial infrastructure is far more complex yet secure in comparison. The hurdles are natural.
In what way is it more "secure"?
How is India's system any less secure?
I think the thing is, because the system in the US was developed much earlier, it might have become more difficult to switch over to newer technology. Leapfrogging [1].
[1] https://en.m.wikipedia.org/wiki/Leapfrogging
How is India's system any less secure?
I think the thing is, because the system in the US was developed much earlier, it might have become more difficult to switch over to newer technology. Leapfrogging [1].
[1] https://en.m.wikipedia.org/wiki/Leapfrogging
Its really less secure. There is no seperation between identity and authentication so stealing a cc number would be enough to complete a transaction whereas a UPI Id won't help you much to steal money.
This is why you need to depend on nasty solutions like chargeback
This is why you need to depend on nasty solutions like chargeback
I wonder what type of limits would be imposed on the "FedNow" system. Zelle transfers are already restricted to a daily limit of $2000-2500 in my experience. ACH transfers I have seen top out at $25-30K per day.
India's UPI say's hi.
Also Brazil's Pix payment system. A huge success.
Man, Pix doesn't get enough love honestly.
A payment system that is so cheap (free), fast and intuitive that people use it as a messaging system (via transaction description field).
A payment system that is so cheap (free), fast and intuitive that people use it as a messaging system (via transaction description field).
El Salvador T365 and UNI say hola :)
Sweden's Swish says hej
UK Faster Payments sends its greetings from 2008
I think some parts of this system may already be available to end users today. I noticed recently that Chase allows me to transfer money in real time ("using the US real-time payments network") to an account I own at Bank of America. And indeed, the transfer showed up within minutes.
That would be RTP, another recently developed instant transfer system run by one of the US ACH operators, The Clearing House (the other one being the Fed, which runs FedACH).
Is it really a competition if you are doing $73 trillion in transactions and your competitor is at a $80 billion a year run rate?
Depends who you’re asking: the FTC, or Apple/Google?
I'm curious for the UK, my understanding is that you just need someone's name and some identifiable codes. But do you facilitate the transfer using your local bank's app or is there some app provided by the UK?
In the US I imagine it's going to have to be done by each individual bank which might be kind of messy.
In the US I imagine it's going to have to be done by each individual bank which might be kind of messy.
It’s done in the bank app using the account number and sort code. I understand name is now checked to prevent accidentally sending the money to the wrong account, because of a typo for example.
Not typos. The name check is because there's a popular scam which goes like this:
Suppose your grandmother died, and it has been pretty complicated sorting everything out. There's a lot of money that needs to be moved around, a lawyer is involved, Smith, Smith and Thompson. It's not difficult to find people who are involved in such things, after all they might Tweet about it, mention it on Facebook, that sort of thing, "Sorry, grandma Josie died, we're sorting everything out so I won't be at FishCon".
One day you get an email, or it could even be a physical letter, and it seems to be from Smith, Smith and Thompson. It explains that they've just switched banks, and so please ensure that any future payments go to their new account, sort code 12-34-56, account 87654321.
Well that's lucky, you have £18 500 of grandma's money to send over because her shares in a Singapore company were sold this morning when their market opened and that money now needs to be sent to Smith, Smith and Thompson. So you type in the numbers from the letter, the bank asks you who this payment is for, you say "Smith, Smith and Thompson", and you send £18 500.
Unfortunately, account 12-34-56 87654321 is not the new account for "Smith, Smith and Thompson" it was opened in the name of a recent immigrant, Jan and it was empty before your £18500 was transferred, whereupon it was all withdrawn. In a few days when you realise you were scammed, the money isn't there. Your bank might take pity on you, or they might not. If police are called, Jan doesn't have the money, he was given £20 by some guy at a friend's party to do bit of paperwork, easiest £20 he ever made. The cops probably eye him up, then give him a caution and send him on his way, he's just a dupe.
So the name check is because while scammers could easily find someone like Jan, they're going to struggle to find people with names like "Smith, Smith and Thompson" which match a suitable business. This was deemed to be a sensible change because people who don't understand IT assumed the reason they were asked for the name was because it was needed, whereas actually it was for their reference. I used to have ones labelled "Mum" and "King Chris" (it's short for "Fucking Chris") but now it's checked.
Suppose your grandmother died, and it has been pretty complicated sorting everything out. There's a lot of money that needs to be moved around, a lawyer is involved, Smith, Smith and Thompson. It's not difficult to find people who are involved in such things, after all they might Tweet about it, mention it on Facebook, that sort of thing, "Sorry, grandma Josie died, we're sorting everything out so I won't be at FishCon".
One day you get an email, or it could even be a physical letter, and it seems to be from Smith, Smith and Thompson. It explains that they've just switched banks, and so please ensure that any future payments go to their new account, sort code 12-34-56, account 87654321.
Well that's lucky, you have £18 500 of grandma's money to send over because her shares in a Singapore company were sold this morning when their market opened and that money now needs to be sent to Smith, Smith and Thompson. So you type in the numbers from the letter, the bank asks you who this payment is for, you say "Smith, Smith and Thompson", and you send £18 500.
Unfortunately, account 12-34-56 87654321 is not the new account for "Smith, Smith and Thompson" it was opened in the name of a recent immigrant, Jan and it was empty before your £18500 was transferred, whereupon it was all withdrawn. In a few days when you realise you were scammed, the money isn't there. Your bank might take pity on you, or they might not. If police are called, Jan doesn't have the money, he was given £20 by some guy at a friend's party to do bit of paperwork, easiest £20 he ever made. The cops probably eye him up, then give him a caution and send him on his way, he's just a dupe.
So the name check is because while scammers could easily find someone like Jan, they're going to struggle to find people with names like "Smith, Smith and Thompson" which match a suitable business. This was deemed to be a sensible change because people who don't understand IT assumed the reason they were asked for the name was because it was needed, whereas actually it was for their reference. I used to have ones labelled "Mum" and "King Chris" (it's short for "Fucking Chris") but now it's checked.
"Fraud and misdirected payments"
https://www.wearepay.uk/what-we-do/overlay-services/confirma...
https://www.wearepay.uk/what-we-do/overlay-services/confirma...
What a brilliant write-up.
You can also do it via phone number, with paym.
Between RTP and FedNow, the US should finally have real-time 24/7 365 free payments between bank accounts.
These payments settle instantly with finality. Just like sending USDC but without the high fees and huge delays of using a blonkchain.
Or as Europe calls it, 2008, but hey a win is a win.
These payments settle instantly with finality. Just like sending USDC but without the high fees and huge delays of using a blonkchain.
Or as Europe calls it, 2008, but hey a win is a win.
What huge delays are you running into on the blockchain? I never wait more than a minute or two... occasionally with a bridge maybe.
bitcoin only completes one block every ten minutes. If you want to be safe you need to wait multiple blocks. Yes, 99+% of the time you're transaction will be included in the next block, but that's not guaranteed.
Waiting a minute is also completely unacceptable. Imagine if you had to wait a minute every time you wanted to sue your credit card, grocery stores would grind to a halt.
Waiting a minute is also completely unacceptable. Imagine if you had to wait a minute every time you wanted to sue your credit card, grocery stores would grind to a halt.
Addressing just the first paragraph, they talked about usdc so they're talking about Ethereum, which has a block time of 10-15s.
That’s glacial in the payments space. Imagine you had to stand in front of the counter at McDonald’s for 30-60 seconds to see if your payment went through.
I use the cryptocurrency from MIT (Algorand), which literally costs 1/10 of a penny and confirms within about 14 seconds. Block times moving to 3.7 imminently so that will change to under 12 seconds and then we will get 2.5 second block times a few months after that so confirmation within 7.5 seconds.
This confirms instantly, give or take, and assuming they keep the pricing the same as ACH costs $0.0025 to send and $0.0014 to receive in volume. [1]
And it actually goes directly into your bank account.
Further, Algorand isn't "from MIT" it was started by an MIT professor, and their actual transaction fee is a sum total of the direct fees (roughly zero right now) plus the block reward divided by total transactions in a block.
[1] https://www.frbservices.org/resources/fees/ach-2022
And it actually goes directly into your bank account.
Further, Algorand isn't "from MIT" it was started by an MIT professor, and their actual transaction fee is a sum total of the direct fees (roughly zero right now) plus the block reward divided by total transactions in a block.
[1] https://www.frbservices.org/resources/fees/ach-2022
Started by an MIT professor, worked on by said professor and others with MIT association, therefore from MIT is an apt description.
Most people are hard coding in the 0.001 fee.
When you say it confirms instantly that remains to be proven.
Most people are hard coding in the 0.001 fee.
When you say it confirms instantly that remains to be proven.
It is in no way endorsed by MIT as your phrasing implies. Again the total fee is direct fee plus proportional share of block reward.
There’s no reason to think it wouldn’t be instant. SEPA payments are in Europe, Faster Payments are in the UK and Australia has one too. That’s not an exhaustive list.
I wouldn’t call it a “google AI” just because it was created by an ex employee who thinks it’s sentient. I wouldn’t call Nest an Apple camera just because it was founded by a group of Apple employees. If I did I’d surely be on the receiving end of a lawsuit seeking to clarify that point.
There’s no reason to think it wouldn’t be instant. SEPA payments are in Europe, Faster Payments are in the UK and Australia has one too. That’s not an exhaustive list.
I wouldn’t call it a “google AI” just because it was created by an ex employee who thinks it’s sentient. I wouldn’t call Nest an Apple camera just because it was founded by a group of Apple employees. If I did I’d surely be on the receiving end of a lawsuit seeking to clarify that point.
I didn't call it the "MIT cryptocurrency" I said it was from MIT. Silvio Micali is not an ex MITer.
I'm sure if you looked at the actual on the ground implementations they are not all effectively instant for the consumer.
I'm sure if you looked at the actual on the ground implementations they are not all effectively instant for the consumer.
It's not 'from MIT' any more than a Nest thermostat is 'from Apple'
> I'm sure if you looked at the actual on the ground implementations they are not all effectively instant for the consumer.
They actually are. Not sure why its so hard to believe you can update a SQL database in a few milliseconds.
> I'm sure if you looked at the actual on the ground implementations they are not all effectively instant for the consumer.
They actually are. Not sure why its so hard to believe you can update a SQL database in a few milliseconds.
Is this functionally equivalent to what banks in Europe already do for transfers?
Yes, this is very close to instant SEPA, although limited to the US domestic financial market currently (tangentially, several central banks are talking about interoperating for cross border transfers).
https://www.europeanpaymentscouncil.eu/what-we-do/sepa-insta...
https://payhawk.com/blog/what-is-instant-sepa-a-look-behind-...
https://www.europeanpaymentscouncil.eu/what-we-do/sepa-insta...
https://payhawk.com/blog/what-is-instant-sepa-a-look-behind-...
Probably our entire system here in the US is a joke. I mean Crypto has also been doing immediate transfers for how long now? But we have to wait 3 - 5 business days (sometimes longer) for money to transfer between banks here in the US in... what year is it... 2022?????!!! lol
> we have to wait 3 - 5 business days (sometimes longer) for money to transfer between banks here in the US
The US has been historically so flush with capital and regionally isolated that there was no burning need nor desire for much centralized governance let alone bank coordination so it still hasn’t developed the muscles to do much of that. Historically, other countries have needed to tightly control and coordinate capital in order to survive against geopolitical challenges and so have everything in place in order to, for instance, make the end user banking experience efficient between banks. Understand this and suddenly America makes a whole lot more sense.
The US has been historically so flush with capital and regionally isolated that there was no burning need nor desire for much centralized governance let alone bank coordination so it still hasn’t developed the muscles to do much of that. Historically, other countries have needed to tightly control and coordinate capital in order to survive against geopolitical challenges and so have everything in place in order to, for instance, make the end user banking experience efficient between banks. Understand this and suddenly America makes a whole lot more sense.
> The US has been historically so flush with capital and regionally isolated that there was no burning need nor desire for much centralized governance let alone bank coordination [...]
Until fairly recently in large parts of the US, it used to be illegal for banks to have more than one branch. (The last restrictions on branch banking in the US only came down at the end of the 20th century or so. It was a long and slow process.)
For comparison, Canada is just as wide-spread, but they had national banking chains since forever (because they were legal), and with that came national coordination.
Until fairly recently in large parts of the US, it used to be illegal for banks to have more than one branch. (The last restrictions on branch banking in the US only came down at the end of the 20th century or so. It was a long and slow process.)
For comparison, Canada is just as wide-spread, but they had national banking chains since forever (because they were legal), and with that came national coordination.
> I mean Crypto has also been doing immediate transfers for how long now?
How do you reverse that charge in case of accident or fraud?
ACH isn't great and RTP/FedNow are significant improvements, but there are reasons why reconciliation exists.
How do you reverse that charge in case of accident or fraud?
ACH isn't great and RTP/FedNow are significant improvements, but there are reasons why reconciliation exists.
I’m not sure you can reverse a FedNow payment as it uses a good funds model. The same way you can’t reverse a wire and the only reversible allowable for ACH is for erroneous files/payments and unauthorized debits (not all fraud is applicable there).
ACH has always been next day. It was processed at night, so the funds were available the next day. In 2016 it became same day. It is processed four times a day, so is available four times a day.
If your bank is locking up the funds for 3-5 days, that's their decision and has nothing to do with the US banking infrastructure.
My bank processes all transfers same day.
You should take advantage of the many alternatives and switch.
If your bank is locking up the funds for 3-5 days, that's their decision and has nothing to do with the US banking infrastructure.
My bank processes all transfers same day.
You should take advantage of the many alternatives and switch.
> But we have to wait 3 - 5 business days (sometimes longer) for money to transfer between banks here in the US
For quite a lot of transactions, you can pay extra to make them near-instant. The capability is and has been there for a long time, it’s just moated by a profit model that penalizes the people with the greatest need for quick access to use resources which rightly belong to them.
For quite a lot of transactions, you can pay extra to make them near-instant. The capability is and has been there for a long time, it’s just moated by a profit model that penalizes the people with the greatest need for quick access to use resources which rightly belong to them.
Yeah like 35 dollars per transaction right?
Right. (I feel like I should add this disclaimer because I don’t think you’re hostile to the problem as stated and also because I don’t want to be misconstrued as shilling “crypto”; below is expansion of the thought in case it’s not immediately obvious to other readers, and not advocating for any solution other than recognizing the current one is effectively reinforcing poverty.)
Roughly equal to common overdraft fees, which similarly burden those most in need of fast transactions. And often these burdens compound not just on themselves but on top of each other too, eg if I help a family member cover an expense plus overdraft we have to pay double the overdraft to pay the overdraft; when I was tight on money between jobs but had available credit I’d have to pay another increment of the same, plus interest. All told, it could cost around 150USD pay a 5USD bill. Which only affects people who are unable to pay such a small bill. Now that I’m not between jobs and the burden of fees is less of a concern, but I don’t have to worry about the fees at all because they’re processed out of my bank account. But the transfer still has a fee for the recipient if they need it sooner than “in 3 business days” which can often be effectively a week. That’s long enough to incur much greater costs, ranging from further monetary penalties to eviction depending on what payment is due.
We’d all be better off, as a family, opening a joint bank account but I’d be surprised if that wouldn’t flag a fraud alert if not actually violating some law I’m unaware of.
Roughly equal to common overdraft fees, which similarly burden those most in need of fast transactions. And often these burdens compound not just on themselves but on top of each other too, eg if I help a family member cover an expense plus overdraft we have to pay double the overdraft to pay the overdraft; when I was tight on money between jobs but had available credit I’d have to pay another increment of the same, plus interest. All told, it could cost around 150USD pay a 5USD bill. Which only affects people who are unable to pay such a small bill. Now that I’m not between jobs and the burden of fees is less of a concern, but I don’t have to worry about the fees at all because they’re processed out of my bank account. But the transfer still has a fee for the recipient if they need it sooner than “in 3 business days” which can often be effectively a week. That’s long enough to incur much greater costs, ranging from further monetary penalties to eviction depending on what payment is due.
We’d all be better off, as a family, opening a joint bank account but I’d be surprised if that wouldn’t flag a fraud alert if not actually violating some law I’m unaware of.
There you go. Sounds like a regressive service that promises "faster payments" but instead takes days by default and you must pay more for it to go faster and gets more expensive if you transfer tens of thousands or hundreds of thousands if you are sending the money internationally.
Cryptocurrency technologies such as Ripple, Stellar and Algorand are already faster, available worldwide and are significantly cheaper in fees per transaction and are aiming for ISO 20020 compliance, meaning that they will be compatible with the same financial payments messaging standard used by the current system.
It doesn't mean it those three will 'take over the current system' like what many crypto maximalists keep screaming about, but those three technologies have the highest likelihood to work with the current system when crypto becomes more regulated in the future.
Cryptocurrency technologies such as Ripple, Stellar and Algorand are already faster, available worldwide and are significantly cheaper in fees per transaction and are aiming for ISO 20020 compliance, meaning that they will be compatible with the same financial payments messaging standard used by the current system.
It doesn't mean it those three will 'take over the current system' like what many crypto maximalists keep screaming about, but those three technologies have the highest likelihood to work with the current system when crypto becomes more regulated in the future.
just wait until a doctor asks you to physically mail a CD ROM, or fax them something. in 2022.
I did an ACH transfer recently between my own two accounts. It took two weeks. What the hell, it's just one addition and one subtraction operation, taking nanoseconds on modern computers.
what programming language is this being developed in?
MySQL with a manually maintained spreadsheet on Windows 98 that get held hostage by outgoing presidents.
I was going to send a job application to work on this a few years ago; I decided against it after discovering it was in Java.
JavaScript, interacting with a cobol backend
If there's no VB6 components I will be very disappointed. I mean, how else will you create the Active-X objects for the javascript to interact with?
Great question.
Any chance this can be iterated on and replace credit cards?
Credit cards are loans and this system is about making payments.
The closest thing would be a debit payment network (eg the card swiper has funds to pay immediately and is not relying on a 3rd party extending credit to them to complete the transaction).
The closest thing would be a debit payment network (eg the card swiper has funds to pay immediately and is not relying on a 3rd party extending credit to them to complete the transaction).
Why would I want to use my money when I can use the banks money to pay for things?
Highly doubt this will allow chargebacks. Using it for normal purchases will be financially irresponsible unless the seller offers a steep discount.
Why would I want to replace my credit cards with this?
as a consumer, the only reason I can think of is goods would no longer be inflated by 3-5% (assuming a high adoption rate). as a vendor, it would be equivalent to cash so no longer need to accept physical cash which has it's own pitfalls (ie, secure transportation to bank, constantly having to keep a count, slippage)
It will replace debit cards and probably have a gateway at POS to existing bank networks. Not sure how quickly that will roll out, hopefully will not require brand new terminals across the country.
It will replace the use case of using credit cards to pay immediately, but not the carrying of high interest debt case.
It will replace the use case of using credit cards to pay immediately, but not the carrying of high interest debt case.
We just got tap and pay terminals to be ubiquitously deployed (and are still a major pain). It took a global pandemic - any point of sale rollout would be decades long.
That just reminded me about how my CC's tap to pay spend limit was like $40 per transaction before the pandemic. That was a huge waste of a feature until the limits were raised.
From what I recall those limits only let you skip entering the pin.
Had those in California a year or three before the pandemic.
Walmart, Home Depot, Lowes, Fred Meyer (Kroger), and Winco (also grocery store) still do not have tap to pay, even though their terminals are capable and have the tap to pay symbol. Infuriating. Every other place I have been to has tap to pay.
That's crazy. I don't think teenagers in the UK ever carry physical credit cards on them. They just wave their phone at stuff. Even the people I buy pizza from, who are literally in a van, in a car park (it's the best pizza in the city, what can I say, the man may not want to run a proper sit-down restaurant but he does know how to cook a really good pizza) have tap to pay. The buses, the corner stores, everything has it.
The smaller places all have tap to pay in my experience. It is the large businesses, which I listed, that do not seem to have incentive to update their systems to allow tap to pay.
banks dragged their feet getting rid of signature and switching to chip and pin
I expect the roll out to banks would be slow and the roll out to consumers to be even slower.
I expect the roll out to banks would be slow and the roll out to consumers to be even slower.
Anybody know if there's corresponding action expected in Canada? They tend to move in lockstep with the Americans on stuff like this.
Isn't Interac equivalent?
No, interac is a layer on top.
A layer on top of what?
I'm fairly certain interac is its own network, though transactions CAN be routed over the visa network.
I'm fairly certain interac is its own network, though transactions CAN be routed over the visa network.
Hard to tell from the article, is this FedNow moving into production? Implemented the same as FedNow?
It's incredible how "fast" US is moving on this vs neighbor directly north.
Canada is truely and increasingly falling backwards into the stone ages in areas were fed regulation comes before technology.
There's no other way BUT bring politics into this since if we want to move forward on federal regulated payment infrustruction, change must come from the government.
the current Liberal government want to keep chasing feel good leftwing policies than enable more business of all sizes to compete in a global stage.
Sad times.
Canada is truely and increasingly falling backwards into the stone ages in areas were fed regulation comes before technology.
There's no other way BUT bring politics into this since if we want to move forward on federal regulated payment infrustruction, change must come from the government.
the current Liberal government want to keep chasing feel good leftwing policies than enable more business of all sizes to compete in a global stage.
Sad times.
I'll stick with cash which is still instant.