We have crappy old subways, airports, bridges, skyscrapers, and so on... because we built them early, versions 1.0. And they stuck around.
Other countries had the luxuries of building their versions decades later, when the technology was 2.0 and 3.0 and so on.
So the US is stuck with both old and crappier versions of a lot of stuff, but where it still doesn't make financial sense to rip them out and replace them with the newest.
Our financial system suffers from a lot of similar flaws. E.g. by the time other countries knew enough to base their credit cards on chips+PIN, the US was still stuck with a legacy installed base of stripes+signatures. Money transfers is just one more example.
London, Glasgow, Budapest and Paris all have metro systems that predate the New York Subway
There are multiple bridges that are still in use that predate European colonization of North America
While the oldest airport is in the US, (College Park), Hamburg, Bucharest, Bremen, Rome, Amsterdam, Paris, Sydney all follow very shortly after
AFAICT Skyscrapers is really the only example you give where the US canonically built the v1.0
I think that there are probably other reasons, my suspicion is primarily rent seeking
The underground in Glasgow was comprised of orange trains. They “ran like clockwork” and had the nickname “the clockwork orange”, which is where the Stanley Kubrick movie title came from. Allegedly.
[0] https://en.wikipedia.org/wiki/A_Clockwork_Orange_(novel)#Tit...
Never thought I'd get to know what Clockwork Orange actually means through a random comment on HN.
Before WW2 there wasn't much infrastructure to begin with, the big highways have been built after.
The metro lines from before are still there and the bridges that were built before the war have just been rebuilt in the same places (i.e. were the roads arrived and the river was narrow).
Most of the big cities also still have medieval and older city centers, and we're still using roman-era routes for roads.
There are bridges in use that predate Christianity.
US has more than 10,000 banks and credit unions. That combined with the fact that US the most "market driven" of the industrialized countries it has take a backseat approach of letting the "market" solve it
There have been attempts by the "market" e.g. wallets and lately "push to card" by VISA/MC and RTP by the The Clearing House but it has realized that the Federal Government needs to come up with a standard settlement network with specifications and a protocol that "market" i.e. private companies can build upon.
Given the timeline i.e. 2023-2024, it may be a little late since apps and companies building on top of P2C (Push to Card) and RTP (Real-time Payments ) are likely to corner substantial portion of faster 24x365 payments before FedNow is ready.
And don't forget even if it's ready on time it'll take another 2-4 years for all the Financial Institutions to connect to it
The main digital ID system was also made and is owned by the banks. The government just set legal standards for digital ID to fulfill to be legally valid, there were a few competitors (including one by a phone company), and the bank system won because everyone already had strong digital ID for internet banking.
The EU-wide international systems, however, have been pushed from above from the EU
Have there been studies about this? I'm pretty sure Adam Smith predates mass advertising, branding, modern marketing.
To put it simply, humans are creatures of habit. In a vacuum devoid of propaganda, we will still continue to repeat the habits we have developed.
Facebook or google don’t need to do any advertising to keep their audience on the platform. That pesky “g-o” you impulsively type into the address bar will do it for them!
The only saving grace for humanity is that people die, and not all of their habits get passed to the next generation.
The USA is a very strange mix of hyper-first-world and second/third-world, and a lot of it has to do with how taxes are raised and spent.
One aspect of US taxation and funding that seems wildly out of step: Primarily local funding of schools. Way to build inequality into the system!
None of these seem like very close comparisons to the US model. There isn't the same legal independence in Spain on a number of matters, from what I recall, but I'll see if I can find a source that provides a direct comparison. For starters, Spain could actually issue centralized coronavirus restrictions and has only recently devolved this to a limited degree to the autonomous communities.
A few EU countries may be more relevant, but I think the closest comparison I've found so far is with Switzerland where I currently live. However, the federalism in the US seems to involve a lot more infighting with frequent lawsuits between state and federal agencies.
That’s not true in banking though where many upgrades are software based and not so disruptive/expensive. The UK, and presumably other countries, did not start from the systems we have today - we moved from signatures to chip & pin, and from checks to bank transfers to instant bank transfers. My parents would write checks all the time when I was growing up, but I’m in my late 20s and have never written one in my life.
Solely as a side note: London has an underground system from 1863 that is still in use today. New York’s subway (the first in the nation) didn’t get going for more than forty years later.
Is that really true?
ATMs were first in Europe and Japan, BACS in the UK is older than ACH in the US.
I think this is more about lack of coordination (i.e. political reasons) than something like a natural first mover disadvantage.
German debit cards for example simply had both stripes and chip for the transition period.
1) I think US tend to think of itself as No.1 nation and makes it less likely to look at other countries doing things better and looking to follow. I think this becomes a mental limitation for many US citizens and policy makers.
2) There is too much corporate capitalism. Money in politics etc. Look at the internet system where Google tried to roll out fibre and there were regions passing laws stop competitors even going into the market. Look at the prices you pay for mobile services. For the world leading free market, there is way to much corruption where markets are restricted rather than government pushing to open established markets to new business when they become entrenched.
3) Over investment in military. US could have that budget, still be the largest military by a mile and be dropping hundreds of billions in building and repairing infrastructure.
4) Too much focus on making money vs doing things well. The desire to keep building a nation seems to be gone. same in my country of Australia. You read history from earlier in the 20th century and they had a view to get things done that would benefit a nation overall. Now its 'would a rail line really pay for itself and be cost effective' type mentality that limits visionary projects.
5) Career politicians. Like other nations I think many career politicians want to take the safe route for reelections. There is endless media criticism of these guys if something goes wrong, and big projects, things do wrong and no-one wants to hear were putting up taxes this year to pay for stuff. No idea how, but we need to filter better for people that believe in what they are doing and have a vision vs popularity based vote for me campaigning. And generally vet them for brains and ability vs I always vote for this party.
Take US healthcare. There are a lot of models for how you can deliver universal healthcare to all your country's residents. They're all different. They all have problems. They're all better than the current US situation. They're all cheaper for a start, most of them have better outcomes by some measures, often by almost all measures.
There was plenty of room for two political parties to have ideological disagreements about how to deliver universal healthcare to Americans as a result. Which examples to follow and which to reject.
But the Republicans didn't do that. They decided the hill they wanted to die on (or at least, for some of their voters to die on) was the ideological rejection of universal healthcare as a goal. They would literally tell people it can't be done, despite the fact that every comparable country already did it.
- It's primary purpose it to bill people, not to cure people. It is doing really well at this.
- The secondary purpose is to provide incredible care to the richest of people. It does pretty well at this as well. Not as good as it used to, but still probably good enough.
Pretty far down the list of priorities is to heal poor people and make sure they don't fall sick again. It is not something most people give a shit about. If they die, they hey they should have been rich instead.
It is slowly changing with the middle class that was rich enough to get good care being eroded away enough to realize no-one gives a shit about them but they have enough voting power that people have to pretend (similar situations happen all over the world, just maybe not with healthcare).
The coronavirus testing response, where the USA refused to use existing, proven, tests from Germany (or S Korea) proved this to me more than any other single event.
The gears were set in motion prior to the Pandemic. They are just saying that the Pandemic reinforces the work they have been doing.
"Since we initiated FedNow one year ago, we have been hitting our project milestones, and today I am pleased to announce the Federal Reserve Board has approved the core features and functionality based on extensive input from stakeholders."
We’ve had a single unified payment network for like 40 years. We’ve had instantly settled electronic transfers (Interac e-Transfer) exposed to consumers directly through their institutions for about 20 years. We’ve had chip and pin and NFC contactless payments for quite a long time.
And the rip off is really just the handful of big banks. My credit union (which is in another province but thanks to the unified network and mobile deposit, etc I’ve been able to continue using on the other end of the country without issue or inconvenience) provides free accounts with no per-transaction or other fees. They’re also happy to issue a loan or provide other services online.
Obviously I’m not as familiar with the US system, but I think putting Canada anywhere near the same level as the US is a mistake.
And for instantaneous transfers, we have Fedwire. The original real-time wire service. It’s free for most commercial and high net worth users, and thus, from a bulk economic perspective, sufficient for industry.
1. Send the payment through your logged in session at the bank or credit union, or via their respective phone app. 2. Select the recipient, adding a new one if needed. They'll need a mobile # or email address. 3. Include the question and its one-word answer that the recipient has to answer to accept. 4. Hit send 5. Recipient is notified, follows the link, and answers the question. If they have it set up, it might be auto-deposited without the question/answer.
It takes minutes, and doesn't ask the sender for the recipient's banking details.
And many poorer countries too -- pretty common here in Thailand to scan a QR code with someone's bank details in it to send them money, bank-to-bank, instantly.
here in Europe it's the contrary :)
and btw: the service will be active in 2023 or 2024... while I enjoy immediate transfers bank to bank since years...
1) Americans have been trained from birth to distrust government in all forms. Centralizing more and more services triggers a visceral fear response. (IMO it's nonsense, for the most part, but it's there nonetheless.)
2) Being "first to market" with new technologies often means you're just stuck with the sub-optimal first version, while other countries can learn from your mistakes when they do their first implementation.
On the flip side, when I'm in Europe, I definitely run into more places that only take cash, which I find annoying to no end. It's rare for places in the US (at least in fairly well-populated areas) to not take credit or at least debit cards.
There’s advantages and disadvantages to being early.
Great thing about the US is that it's possibly the biggest homogeneous market in the world where you can form a lot of reliable expectations of people throughout. By contrast, countries such as China and India are highly diverse culturally. You can't even expect people to be speaking the same language (yes, each have national languages but not everyone speaks them and it's not a first language for many.)
I imagine China is a lot like the Philippines. There are a lot of dialects and then one national language. The national language here is Tagalog, but English is also a national language.
You can expect that almost everyone speaks the local dialect unless they are from another region. You can expect that most people speak conversational English. Some have a difficult time speaking Tagalog and may revert to English if Tagalog is the only common language among the speakers.
People feel confident speaking the languages they use regularly. For regions outside the Tagalog regions, that's mostly the regional dialect. Most street signs are in English. Local TV is mostly Tagalog but there are English stations as well.
Everyone is unique, but in many cases people have no reason to speak Tagalog. They may hear it, but hearing is different than speaking. In any case, you can't make the same assumptions nation-wide as you can with people in the US.
In the Philippines, you could do pretty good with marketing in English. Kids are taught English in school and it's possible the regional dialects could quickly disappear in the future. If you're going to learn only one language in the Philippines, it should be English. Other countries may not have this same unity on language. Each country is different.
In the US, you have (Wikipedia 2019 numbers) nearly 330 million people who you can make solid assumptions for in terms of language. Most of those people are English as a daily driver if not a first language. It's hard to beat the combination of one of the most widely spoken languages and one of the largest countries by population.
I don't know what other language has that many "first language" speakers in a single country. Mandarin could be, but even within the Mandarin language there are lots of dialects (one caveat is that the writing system is the same for all.) So, it's difficult to determine what the actual numbers are. According to a quick Google search, a quarter of the Chinese population doesn't speak the common tongue at all.
An honorable mention might be Brazil, a country with a population of over 200 million and all-in on Portuguese.
Different languages embody different cultures, and different ways of thinking. This diversity should be celebrated and embraced, not only as an aesthetic matter, but also because being able to communicate and think in different ways makes humans more capable.
Maybe what happend in 2020 would change that...
I have heard similar stories from Europeans coming from places with strong dialects / local languages, so it's not unique to China for sure.
i believe losing linguistic variety is almost a tragedy.
And otherwise I like cash and social security is one factor. Let's take a "problematic" country like Germany and its social security net. In the event that you cannot take care of yourself, the government gives you the minimal amount of money you need to survive. In exchange for total control of your accounts. There is a gray area with abuse of social security, but I think it is clear what that control can entail.
Will they even seize 10$ you got from your friend for a pack of cigarettes? Yes, they will... Being critical of government is the better way, it cannot be your parent and if it is, it is a lousy one. These rules were made by civil servants that cannot even get into that situation and it shows.
So don't give up the suspicion just yet.
This is mostly for tax evasion reasons and sometimes for employees skimming off the top. The more “proper” a place, the less likely they are to encourage cash transactions.
Happens in US too, of course. It’s always the shady places that are cash only and everyone else is digital.
* Fees for the rental and maintenance of payment card terminals.
* Gateway fees.
* Cost of fraud prevention services.
* Fees or premiums to insure against ‘forward delivery risk’
All of this erodes the already thin margins that small businesses typically operate at.
And then you have cash: no fees, instant payment, private.
Even street and marker vendors in The Netherlands accept electronic payments.
https://www.npr.org/2019/06/09/728323278/for-many-germans-ca...
The US is a big place. Maybe where you are it's like that, but that's not at all accurate where I am.
It's either mom and pop places, or places that have been around for decades that "charmingly" never added support for cards. Both of which are probably less shady than average.
Although the pandemic has forced some of those places to start accepting cards now.
Source: Know people who have recently worked across a variety of franchise type locations, they definitely still have _plenty_ of things go below board.
What are your reasons to state that so strongly as if it's a fact?
Nobody in the US wants to pay for infrastructure. It's the governments role, but political figures want to spend our money in less critical ways.
I'm like -- what century do you live in? Since when a) is that an appropriate way to verify an account, and b) does anyone even use cheques anymore?! Most banks don't even issue them anymore and most people don't have them.
Where I'm from (Italy) we still use cheques, and where I live (Hungary) they never used them. This was odd for me.
This resulted in people here buying expensive items by going around with a literal bag of money, or people having to walk into a bank together.
Possibly now it's solved with instant payments and everyone having a mobile banking app, I don't know.
The actual money transfers (the €5 you paid at some shop from your account to the pin terminal vendor, and the hourly or daily total for that shop from the vendor to the shop's internal account) take place hours after the fact.
So for all parties involved it seems instant, but technology wise it's still more or less batched, but seems instant based on trust.
Of course in The Netherlands, we have SEPA Instant Payments now (based on but not entirely the same as the European IP scheme). These are actually instant; when you pay, account balances of you and the creditor (at the other bank) are updated within 5 seconds.
Here in Estonia, or northern europe.. or even eastern europe, nobody uses cheques, nobody has ever seen one I guess.
I haven't bought a car yet, but I guess I would just get the payment details for the car and go to a bank office, give them the seller's bank account information and tell them to transfer the money.
Big purchases won't be helped by instant transactions or mobile banking because there are daily limits on your account, for your protection, so that when someone somehow manages to get into your account (though it should be impossible.. they would need to get my mobile phone, and get my 2 pin numbers that I have memorised. Maybe when someone is forced to go to their internet bank by threat of violence? and transfer money then), then they couldn't take all the money in the account in one day.
The bank didn’t even issue me a check book when I opened my account. Tells you something about the use of check payment here.
Interestingly, it’s been two years since I used cash. I even stopped carrying it in my wallet. And close to an year since I last used my debit card. Apple Pay is incredibly convenient.
When we bought our cars, we just upped the daily transfer limit. I’m not sure how my husband transferred the down payment for our house, though — it was all in his savings account, and was above that 50k EUR maximum daily transfer limit. The proceeds of the mortgage we took for the rest was transferred by the bank to the seller once the bank was satisfied with the purchase contract and that the Grundbuch (city property registry) was clear.
Of course you have to be more mindful about fraud when accepting one but in many scenarios they prove quite useful.
Germany doesn't have cheques.
https://www.europeanpaymentscouncil.eu/what-we-do/sepa-insta...
Normal SEPA does not work in weekends just like ACH even though the core process is moving XML files to an shared FTP server.
SEPA instant could be starting point for mobile based payments in Eurozone which is currently not present in anyway.
you give a SEPA transfer order to your bank in the afternoon.
Your bank consolidates all the transfers for the day in a big XML file and puts it in an ftp server in the evening.
Bundesbank pull it from there and puts the XML file in other banks ftp server.
Other bank pull it from there and completes the transaction.
In case the account does not exist or something happens the whole thing has to happen again to get your money back.
This is similar to BACS in UK.