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Comment by lykr0n | Hacker News Reader

I'd love for the US to adopt a standard that is bank agnostic, like ACH, but allows for near real-time payments from P2P but also person to business payments.

It's a big problem when Visa, Mastercard, and PayPal control a large part of money transactions.

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FedNow is exactly this system [1]. What’s more it’s an initiative by none other than the federal reserve which can, to an extent, twist financial institutions’ arms to adopt it.

[1]

https://www.frbservices.org/financial-services/fednow/announ...

Visa, Mastercard, and Paypal offer more than transactions though; they have "buyer protection", "seller protection", etc.

In theory, all you need is institutional trust and KYC, but as soon as you hit a situation like, "oh shit, someone stole my wallet (/ online identity)", you realize why the fees are there.

There are a lot of transactions that don't need that protection, and it's crazy to have to pay for it on those transactions too. You want to by a 5c emoji for use on a social network? You can't, the minimum transaction fee is 30c. Who's going to issue a chargeback on a 5c emoji? And batching is a non-solution.

Right. UPI appears to be a payment system only. Not a sales transaction system. When you buy something with a credit card, there is evidence of a transaction in both directions - you buy some thing from a seller. That allows disputes, dispute resolution, and reversal.

A one-way payment system, such as Venmo, lacks that. (Venmo is trying to retrofit a dispute mechanism, for which they charge 3% extra.) What's Google proposing? Probably something with terms that include "sole discretion" (theirs) and forced arbitration.

The article is a fairly easy read, and would answer your question "What's Google proposing". They don't seem to be proposing "sole discretion" or forced arbitration. The Indian UPI system specifically involves a central agent, effectively a government body, that is involved in setting up and authenticating all transactions that occur using UPI.

This "protection" is not free, in fact is quite expensive. I think most customers would be better off without them. Many customers when faced with having to pay the 3% for it opt out. And most merchants do not have really any protection at all, at least none that I am aware of.

Compared to the time before cards, merchants are protected from credit fraud by simply being partially connected with the bank so they don't have to hire their own debt collectors.

https://minesafetydisclosures.com/blog/2019/5/29/part-l-a-hi... ( https://news.ycombinator.com/item?id=20523646 )

Nowadays cards are taken for granted and always accepted because it's necessary, but it would still be pretty hard to create your own system that checked if a user had enough funds in the bank to purchase something without either Visa/MC (or I guess Plaid).

I would like to try out the (European?) variation on Escro where in transactions are collected and at the end of a month there's a statement you get to review for a few days, and by default everything's approved.

That would offer buyer protection, seller protection would necessarily relate to some combination of combining contract fulfillment reliability / risk and where fitting holds that either side can clear early if the transaction is canceled. (With notification)

Yea until they don't. Exhibit A: StubHub [1]

[1]: https://www.wkbw.com/rebound/coronavirus-money-help/stubhub-...

>> "oh shit, someone stole my wallet (/ online identity)"

Isn't one supposed to be responsible for their own passwords/security? Does Microsoft take responsibility if someone steals your windows password or hacks your computer? No, they will just say its you who didn't install the security updates. Why should a banking transaction be any different?

Because banking is serious business and windows is not.

Because if this became the way the world works way more people would be scammed.

There is one. It is called RTP - Real time payments

It is currently undergoing adoption among several big banks, although adoption for individual non-corporate accounts is slow

How does it compare to Zelle (Early Warning Systems) from an integration and cost perspective for financial partners?

Personally, I’d rather the Fed run real time payments instead of some private consortium made up of the largest US banks (some governance/overnight vs less so as a private corporation), but the Fed’s been dragging their feet for years while Zelle has rolled out quickly. Humorously, Facebook’s Libra is what set a fire under the Fed [1] [2].

[1] https://www.bankingdive.com/news/fed-gives-new-details-on-it...

[2] https://www.federalreserve.gov/newsevents/pressreleases/file... (warning: 50 page pdf)

"Personally, I’d rather the Fed run real time payments instead of some private consortium made up of the largest US banks "

I allways thought, that the fed is exactly this? A private consortium out of the biggest US banks?

(But I am not a US citizen, but this is what I understood and thought strange, compared to the EU for example)

It’s a public private hybrid entity that is accountable to the US Congress (who also defines their mandate).

https://www.federalreserve.gov/faqs/about_12798.htm

We already have wire transfers, but due to high costs they are really only used for high value transactions.

Wire transfers are literally nineteenth century technology. They're a bad choice today for transactions of any value.

They're amazing if, in fact, you don't yet have the Public Switched Telephone Network, and so ordinarily data moves no faster than a horse in your culture. And they're completely astounding if you do not yet have the Universal Postal Union and so ordinarily data doesn't move over long distances at all.

But if you live in the mid-20th century or later you can do better. "Let's make wire transfers free" is one of those ideas which you'd come up through lack of imagination. There's an apocryphal Henry Ford quote about customers wanting "faster horses" but more recently when people had no idea they all wanted a handheld computer we told them it was a "mobile telephone" so they'd buy it and we could let them discover they've never wanted a telephone anyway but they did actually want a handheld computer.

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