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Comment by PaulDavisThe1st | Hacker News Reader

This, absolutely. It is totally embarrassing to watch my UK family or EU friends interact with their banking systems and compare it with the US.

To be fair, things are improving a little bit. But we're still so very far behind the EU banking system. Instant, cost-free transfers between any two accounts, completed faster than you can lift your finger off your smartphone.

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> Instant, cost-free transfers between any two accounts, completed faster than you can lift your finger off your smartphone.

This is available to most people in the US via Zelle. I have been using it for nearly 10 years I think.

https://www.zellepay.com/get-started

Ideally, the federal government would have already made it a utility available to all, but for now the functionality is there for those who can get a bank account.

Who is Zelle and what do they do with the information that they harvest from this service that they offer?

https://en.wikipedia.org/wiki/Zelle_(payment_service)

> Zelle (/zɛl/) is a United States–based digital payments network owned by Early Warning Services, LLC, a private financial services company owned by the banks Bank of America, Truist, Capital One, JPMorgan Chase, PNC Bank, U.S. Bank, and Wells Fargo.[1][2][3][4]

Those are all the biggest banks, so they probably have all the transaction information anyway.

Buuuuut as banks they have a totally different privacy policy than a 3rd party payment system, aren't they?

I have no idea. I just assume everything I do electronically is tracked.

But fraud-wise Zelle doesn't seem as protective as regular banks:

https://www.nytimes.com/2022/03/06/business/payments-fraud-z...

> “It’s like the banks have colluded with the sleazebags on the street to be able to steal,” said Bruce Barth, another victim. In late 2020, Mr. Barth was hospitalized with Covid-19 and his phone disappeared from his hospital room. A thief got access to his digital wallet and ran up charges on his credit card, took out cash at an A.T.M. and used Zelle to make three transfers totaling $2,500.

> All three accounts were at Bank of America, where Mr. Barth has been a customer for more than 30 years. When he filed fraud reports, the bank quickly refunded his cash and credit card losses. But it denied his claims for the Zelle thefts, saying the transactions were validated by authentication codes sent to a phone that had been previously used for that account. Bank of America was essentially saying that the Zelle transactions were authorized — even if his phone was stolen.

But it's available to everybody in Europe regardless of what bank or other service they use.

biiig asterisk on that is necessary

basically friends in the same country using a select few major banks are likely to have instant sepa available between them and it seem like the normal thing, while the reality is that instant-sepa is a massive patch work of availability between countries, banks, currencies

an outsider to the EU trying to do business is unlikely to be a part of a social circle where everyone is using the same thing

theyll encounter super slow multi business day SEPA, where no bank knows where the transfer is yet, the same as ACH in the US

Normal SEPA is max 2 days and usually it takes one. That’s not what I would call super slow.

Its what I would call super slow.

When one of the parent comments that spawned this thread talks about transactions clearing faster than it takes to put the phone down after initiating it, it's quite a few orders of magnitude slower.

Most SEPA transfers (even between countries) are now instant, I've noticed.

Same here. I've got accounts at two different banks, and when I transfer money from one to the other, it's usually there literally the moment I approve the transaction. Within a second. I don't know if it's just as smooth across (internal EU) borders, but I don't see why it wouldn't be.

It's possible that it does require both banks to have implemented these instant payments. Both side have the ability to delay the transfer, but it's possible that these days they're required to support instant transactions.

IIUC, banks can choose which other banks to interface with, provided that both banks are connected to the same clearinghouse. For example, I think some Netherlands banks still choose to limit instant payments only to other NL banks.

My experience of sending money from Czech republic (in EU, but not in Eurozone) to a bank in Netherlands via SEPA is ~4-6hours during banking hours, but I was surprised by immediate transfer from Slovakia (in EU and in Eurozone) to the same account.

I don't want some third party doing the bank transfer, just lets the banks 1:1

You need a network of some sort, unless each bank has to maintain a direct interface with every other bank.

The central bank can do that. That's how it works for instant payments in my country (Pix payments in Brazil).

That seems even less appealing than the sideways system we have in the U.S.

Is there any percent chance that the government doesn't wiretap all those transactions?

Tap on what sense?

The government doesn't hide the fact that all this data can and will be used by the IRF equivalent in Brazil (Receita Federal)

I would assume the same for any credit card payment in the US

Zelle is owned by the big banks. I wouldn’t call it a “third party”. In particular, it is owned by Bank of America, Truist, Capital One, JPMorgan Chase, PNC Bank, Wells Fargo, and US Bank.

> Ideally, the federal government would have already made it a utility available to all

They are working on it: FedNow https://www.frbservices.org/financial-services/fednow/about....

Less than 5 years ago, the Hongkong retail bank system used to charge about 50 HKD to transfer money online to another local bank. Absolute highway robbery / price fixing. Most absurd: Writing a check was free. Can you imagine the comparative operational cost??? Later, the central bank introduced an free, instant, money transfer system, and forced all banks to join. Paying my rent suddenly dropped 50 HKD per month!

Insane. In the States we have similar gouging with fees when you pay with a card, but some law states that a fee cannot be collected for checks. So I paid rent with a check for the majority of my adult life before Zelle came along even though the option to pay with a card was available.

It's also available in Canada through Interac. I'm still shocked when I go to the US and have to sign for a credit card transaction. Last time I did that in Canada was when Bush was president.

Same here in Europe. I've not signed my card for more than a decade because I've never been asked to provide a signature.

You at least have a PIN with your cc. In the US, it's signature or...nothing. Almost everywhere it's a tap or insert the chip. Still a mag stripe swipe in a few places but that's becoming more rare.

You described the US (regarding not signing, you are mistaken about the signature aspect). Most places stopped accepting signatures several years ago. Card readers are almost always 'insert' except in the very rare case where a card doesn't have a chip. Tap and pay is not common, however tap and pay is more common than signing something (in the US companies have been resisting tap and pay due to higher transactional rates). I haven't signed for a transaction outside of a restaurant across 17 states and 4 years. As I mentioned above, the last place I did sign for a transaction was in Canada.

Still no PIN as in the UK and Europe (and maybe most of the rest of the world, though). If you steal a chip card in the USA, you can use it. Not so elsewhere.

Every store I have been to in the last few months is tap to pay. It really seems to have exploded in popularity in 2022.

That's not quite true. I have a USA issued corporate card from Citibank which has a PIN. It only gets requested on rare occasions though, typically at automated terminals.

http://www.citi.com/chipandpin (note, pdf link)

Signatures are silly. They're hard to verify, and easy to forge. And my own personal signature has degraded over the years; I can write my autograph twice, and although they both look to me like my signature, they no longer look like the same signature.

So I can understand why nobody any longer wants to have to verify signatures.

Most people that ask me for a signature (usually deliverymen) don't care what I scrawl on their device; it's usually not even an attempt at a signature, it's just the simplest <squiggle> I can manage on those awful devices.

That has more to do with a foreign credit card.

I haven’t signed in the US for a credit card transaction in at least 5 or more years.

I do if I use my card outside the US.

You don't ever eat in a sit down restaurant or a bar?

That's more related to the tip and restaurants covering their butts.

Credit card processor doesn't require a signature.

That is going away fast. The last time I signed for a credit card was...in Canada. I use a credit card literally everywhere. I do not use my bank account for anything beyond paying the card and 2 other bills. I do this for rewards, payment protection, zero transaction fees (including foreign, like those in Canada, a country in which I visit often). The credit card gets paid off once a month directly from my bank account.

The only exception to this is restaurants, however that is also the case in Canada, and even if I use my debit card, they still bring me the reader, make my stick my card in, print the receipt, and sign by hand.

Where are you in Canada? I regularly visit parts of eastern Canada, including Toronto and Quebec.

Which Bush? :)

That is no solution. The limits are so low you can't do serious transactions with it. I think it's 1000$ instant daily transfer max, then 2500$ daily non-instant transfer.

It’s up to your bank. My max limits are $5k for known parties, $2k for new/unseasoned contacts (Chase).

So even you can't pay a rent deposit, pay university tuition or let alone large items like a car

At the moment. FedNow (new instant payment rails) limits will be $25k to start, negating the issue of low Zelle limits. Progress will arrive.

> I have been using it for nearly 10 years I think.

Zelle launched in June 2017

Freaking hilarious. It astounds me how advanced, yet also archaic the US is.

It was rebranded, but the functionality existed before, at least if you were transferring between the big banks.

> In April 2011, the clearXchange service was launched. It was originally owned and operated by Bank of America, JPMorgan Chase, and Wells Fargo.[6][7] The service offered person-to-person (P2P), business-to-consumer (B2C), and government-to-consumer (G2C) payments.[8]

https://en.wikipedia.org/wiki/Zelle_(payment_service)

Chase’s version was called QuickPay and was rebranded to Zelle around that time. Until its rebranding it was only available to transfer between two Chase accounts if I remember correctly. I used it to pay rent from 2014 to 2017.

Ueah, I use zelle a lot; to move money between my incoming bank, store bank, & spending bank; all 3 different ones.

My auto loan credit union offers 0.5% off on loan APR if I bring my direct deposit to them, but doesn't support zelle.

Zelle is not always instant. There are two ways for a Zelle transaction to clear. The fast one goes through the Visa network, the same network for credit cards and debit cards. The slow ones goes through ACH, which takes several days. It is generally not possible for two recipients to know which network Zelle will use beforehand.

ADDENDUM: The official marketing page for Zelle at https://www.zellepay.com/faq/how-long-does-it-take-receive-m... has this to say about transaction speed:

> Money sent with Zelle® is typically available to an enrolled recipient within minutes.

> If it has been more than three days, we recommend confirming that you have fully enrolled your Zelle® profile, and that you entered the correct email address or U.S. mobile number and provided this to the sender.

Note the weasel word "typically" in the first sentence. If all Zelle transactions went through Visa, all such transactions would be instant and they wouldn't have the need to add the word "typically" in the first place.

The second paragraph asks you to wait three days. That's basically the Zelle fallback path when it uses ACH under the hood.

ADDENDUM 2: This HN conversation really piqued my interest and did more research. So apparently Zelle now uses one of three different networks. According to https://www.americanbanker.com/payments/news/how-the-clearin... :

> The Zelle P2P service currently uses two separate rails to settle payments, depending on the particular transaction, including the ACH network and the two debit card networks: Visa Direct and Mastercard Send. By adding the RTP network, Early Warning will be able to reduce its reliance on ACH, which can at times take days to settle and is operated only in batch mode during business hours.

What does it depend on? And how do you figure out which one it used afterward, if not beforehand?

Interesting, I did not know that! It’s always worked instantly for me, even got a few thousand dollar transfers.

My credit union has a $250 per day cap and $500 per week. It really limits Zelle's usefulness.

Bank of America limits: $2500/d, $10.000/7d $20.000/30d

https://www.bankofamerica.com/online-banking/zelle-transfer-...

Given who owns Zelle and what they do, and that they’re not a bank, I really want zero to do with them. They’re sus AF, IMO, and I’m just waiting for there to be a serious incident.

>Zelle is a United States–based digital payments network owned by Early Warning Services, LLC, a private financial services company owned by the banks Bank of America, Truist, Capital One, JPMorgan Chase, PNC Bank, U.S. Bank, and Wells Fargo.

So it is owned by the banks, but the banks that own and offer it don't give any protections.

It's almost like that's the point. A lot of tech solutions just seem like ways of offloading liability or skirting regulation in a traditional market.

It is governed by regulation E (https://www.federalreserve.gov/supervisionreg/regecg.htm), and Zelle admits as much on their website (https://www.zellepay.com/financial-education/pay-it-safe/und...).

They do try very hard to suggest this doesn't apply. This isn't true in practice, but I'm certain many would give up without trying.

The problem with Zelle is that it's not safe to use for anything except payments to friends and family. The Zelle user agreement [1] puts this warning in all-caps: "YOU SHOULD NOT USE THE ZELLE® SERVICE TO SEND MONEY TO PERSONS WITH WHOM YOU ARE NOT FAMILIAR OR YOU DO NOT TRUST. ZELLE® DOES NOT OFFER A PROTECTION PROGRAM FOR AUTHORIZED PAYMENTS MADE WITH THE SERVICE"

[1] https://www.zellepay.com/legal/user-service-agreement

I've never heard of any protection like this in the EU banking system. If you transfer money to a scammer it's simply gone.

It sucks for the 0,0001% of people who get scammed some time but is it really needed that the bank takes on this role?

If you initiate it - yes. If the seller charges by IBAN via SEPA - you get 8 weeks to chargeback, no questions asked

Aren't IBANs entry only. You can only debit the IBAN.

not sure where you get the 0.0001% figure.

The protections are part of the regulations.

A consumer can reverse a SEPA Direct Debit transaction at any time. This is called a chargeback. A chargeback is allowed up to 8 weeks after the date of the direct debit with a valid mandate and up to 13 months without a valid mandate. At most banks, the consumer does not have to give a reason for the reversal.

https://help.mollie.com/hc/en-us/articles/115000796469-How-d...

Direct debits are the thing used to automatically pay your electricity bill every month. A different system with different rules to a one-off personal or business money transfer.

And this isn't a hypothetical concern. People have sent money through Zelle to the wrong person, either through scam or by mis-typing a phone number, and Zelle support has been very clear that there's no way to get your money back. There was a previous HN post about it.

Regulation E should apply here, limiting liability to $50 (https://www.federalreserve.gov/supervisionreg/regecg.htm), regardless of what Zelle puts in their user agreeement or the training materials for their support personal. Don't even bother with Zelle: call your bank directly.

Sadly the limits on Zelle are too low to pay rent (at least on SF) and it lacks the ability to setup recurring payments (what in the U.K. we would call a standing order.)

BillPay seems the only viable option and that ends up with a physical paper check being mailed to your landlord every month so you have to set them off a few days early to account for possible delays in the mail.

I like Zelle, but this is not comparable to the system I've used in the UK.

- Limits how much you can send

- Identity is based on email or phone number (what?!) that then needs to be managed/tied to the bank account. If you switch banks or whatever, you need to re-active with the new bank.

- For awhile, I could only associated one email with one account in Chase (despite having 4 checking accounts for business, etc.)

- Recipient also needs a Zelle account setup.

UK system is simple: give me your sort code + account #. Done.

The UK equivalent to Zelle isn't BACS/Faster Payments, but https://paym.co.uk/

As I understand things, the US equivalent to BACS would be ACH. Which is also sort code and account number, but allows pulling money without further authorisation as well as pushing money. Obviously doing that when you're not supposed to would be very illegal, but unfortunately that's not enough to stop everyone.

Yup, that was my point. The OP thinks "we already have this in the US" and its not nearly the same.

is pulling via ACH basically a direct debit in UK terms?

Minus all the safety precautions that make DD generally safe to use.

To give you the comparable situation - in the UK we have two numbers associated with every bank account (historically one identified the branch of the bank the account was held with, and the other identified the account, but nowadays there’s no real link between a branch anymore). For me to send money to another person or company’s bank account, I just those two numbers, and I can send up to £25k and it will be in their bank account almost instantly. In the last couple of years they introduced a system where it goes to the other person’s bank account to check whether the name you have given for them matches the name on the account, so it warns you if there is a mismatch that there might be fraud.

You can also schedule in advance “standing orders” which pay money to an account on a certain day. This is how pretty much everyone pays rent. We have direct debits where you can pay companies on a regular basis and almost everyone uses this for bills like for local government taxes, energy, water. With this, the company asks for permission to withdraw money for your account on a recurring basis with your details and you have to approve it. Guarantees are built into this system though, so if the company takes more money than they are supposed to, you can call your bank and they are able to pull back the funds.

Both of these have been around since the 60s so when online banking came along it was just implemented in that. It got faster at some point I don’t remember - it used to take about a day for UK transfers but it’s usually seconds now.

You can also send money abroad but it has slightly different limits and takes a bit longer. You just need the IBAN of the account though and can still all be done online in a few clicks.

Yes, that is much better. I was always envious of my British family’s ability to use teletext and get weather, sports, and even airport arrival/departure info on their TV instantly before the internet was mainstream.

Meanwhile, in the US, I was stuck listening to radio trying to figure out if my school was closed or had a delayed opening on any inclement weather day.

Wait until you hear about France's Minitel!

https://www.bbc.com/news/magazine-18610692

This network/system is called Faster Payments https://www.wearepay.uk/what-we-do/payment-systems/faster-pa...

You may also be interested in Paym which uses mobile numbers https://paym.co.uk/

There are limitations on who can use it, though. For example, I own some properties that I rent out. I would love for my renters the be able to simply send me their rent via Zelle, but Citibank doesn't allow it on business accounts (or at least I couldn't get them to turn it on for mine when I tried a couple years ago). They claimed it was only for personal accounts. I rarely need to send money to people I'm friends with. (And when we do, we use Apple Cash.) I also don't like having yet another company keeping track of whom I interact with.

Zelle doesn't support all banks - the call to action on their home page is even "See if your bank offers Zelle". My credit union, sadly, does not. So it's not really comparable to EU IBAN transfers.

And the EU system is way behind India’s UPI. That system really is a dream. It turned India into the world’s largest real time payment market and basically is Google’s model for FedNow they’re pitching to the federal government. It’s also what the EU is trying to emulate.

Woah, I did not know about India's UPI. And it serves more than India!

Check it out: https://en.wikipedia.org/wiki/Unified_Payments_Interface

    Unified Payments Interface (UPI) is an instant real-time payment system developed by National Payments Corporation of India (NPCI). The interface facilitates inter-bank peer-to-peer (P2P) and person-to-merchant (P2M) transactions.[1][2] UPI is an open source application programming interface (API) that runs on top of Immediate Payment Service (IMPS).[3][4] It is regulated by the Reserve Bank of India (RBI) and works by instantly transferring funds between two bank accounts on a mobile platform.

<< Markets India Bhutan Nepal Malaysia Singapore United Arab Emirates France >>

"Markets" here means some limited ability to transfer to/from India, but nobody uses UPI for domestic transactions in these places.

Singapore has an equivalent system called PayNow, which is equally instant and ubiquitous.

PayNow (NETS) works with ~5 banks and is effective within a place as large as major city. Hardly an analog.

I'm responding to the earlier claim that UPI can be used in Singapore (or anywhere outside India), which is really not the case.

Yeah, it's a dream come true. When I got my first credit card, I was very happy. But later within 2 years UPI got introduced, my credit card activity got decreased because it is far more easy to do transaction with UPI than CCs.

And when Indian Government declared BankNote Demonetization in 2016, it further boosted UPI because people don't had the cash, so ultimately online transaction is the only option. At that time, E-Wallet also made a hype but it wasn't feasible.

UPI has many advantage for both users and merchants. And further Google also introduced their UPI app Google Pay along with some local players like PhonePe and PayTm which makes UPI transaction easy not just to send money to other be it friends or a merchant but mobile recharge, Bills, insurance, etc. can be done from these apps via UPI.

A very annoying thing in the U.K. recently is that companies are making it more difficult to make ongoing payments via “direct debits” which have a high level of consumer protection and encourage people to use “continuous payment authorities” from debit and credit cards which allow companies to take money almost at will, and are extremely time consuming to cancel by the customer.

United States citizens are the only ones who still have to SIGN their credit card receipts, including when they travel.

We are behind the times even with our own "hack" invention. Remarkable.

Any idea what it's like in Canada, similar to the US?

Canada has e-transfers between any two bank accounts via Interac, although some banks do charge a small fee when sending from some types of accounts. Interac debit can also be used pervasively at POS terminals, although credit cards (both Visa and MasterCard) are widely used. I haven't seen a cheque used in any capacity in over a decade.

Edit: Both debit and credit card payments use chip-and-pin or tap everywhere, and have for a well over a decade.

Are you saying that the USA is still far behind the EU banking system? That's news to me - I've always assumed that banking, of all things, would be far superior in the US. I've always imagined that the experience in the US, at least compared to German banks, would be one of slick apps and super-friendly paperwork because 1) banks want your money 2) something something capitalism.

When I want to do a domestic transfer in Germany, if the recipient's bank does not accept SEPA Instant Pay (looking at you, Baader Bank), then it takes around 2-3 _days_ for my funds to get to the other person. That's insane. In India, our slow transfer (It's called NEFT. UPI is the new shiny instant transfer system) takes at most a day and even before UPI no-one was using NEFT because there were faster alternatives. I've always thought that the slow fund transfers were a German thing and that the US would be better. Guess the grass is not greener on the other side.

As you noticed, the involved banks must accept SEPA for that. And it's another dimension to do that across many country borders and so many local banks, while in India everything happens in the same jurisdiction, I assume (same for USA for that matter)

> Instant, cost-free transfers between any two accounts, completed faster than you can lift your finger off your smartphone.

If you're referring to SEPA transfers, then frankly that's a joke. There are 40 cent fees for every transfer and it usually takes hours if not a full day to process as the bank closes the system at like 4PM for some gdamn reason and all further entries have to wait until tomorrow. Like are they processing this shit by hand by actual workers or something?

Maybe my bank just sucks.

SEPA transfers within the Eurozone are not allowed to cost more than a local bank transfer. So if it costs 40 cents for you, it means it's because all your transfers cost 40 cents :)

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