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Comment by legitster | Hacker News Reader

> Everyone gets it instantly.

I have to believe that there is constant, baseline fraud that everyone in these areas puts up with.

In the US, if someone steals my phone or credit card, or intercepts my payments in any way, I pretty much expect to get all my money back. When payments are instant, what's there to stop scammers and fraudsters disappearing with my money?

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I'm not an expert in this area. But a fairer comparison would be a US service like Venmo. In my experience Fraudulent payments with venmo are much harder to recover.

I think a lot of fraud prevention tech can reasonably be done in a matter of seconds. FedNow also proposes to be domestic only for the time being, which means the recipient accounts are in US jurisdiction and easier to shut down and prosecute. Finally, there's no reason a wait-period/cooldown can't be implemented in another layer.

> easier to shut down and prosecute

The problem is when someone spins up a scam account, gets a fraudulent payment, and then cashes it and shuts down the account. If they already have the money in cash, it may be impossible to prosecute.

Any fraud prevention is going to have to be privacy intrusive by it's nature.

This is a horrible excuse for the terrible banking system in the US. We have both instant payments in Denmark and laws to require banks to cover fraud.

How do banks pay for the fraud? Do they charge fees to have a bank account?

UK has instant payments between bank accounts too - no fees to cover fraud and fraud is covered.

UK isn't a good example since they don't have fraud protections in place. This bill needs to into effect before the banks are on the hook. https://bills.parliament.uk/bills/3326

Most banks are signed up to the "Authorised Push Payment Scam Code" and cover fraud, however it's not a legal requirement.

But all banks, of course, have a level of fraud protection in place (just not the legal obligation to replace funds from a scam and compensate/reimburse victims).

It's also worth noting that this is a legal decision, and not a technology issue.

They reverse the payment when law enforcement gets in.

And what if the money is gone by the time law enforcement is involved?

There is a constant need of OTP for every transaction. That sms says again and again Do not share it with anybody or, something similar to that. Instant transfers are only from bank to bank accounts, and not to any personal wallets. Banks have strict KYC requirements to get the documents again every few years. So whoever account is getting the money, bank gas most of their information.

So even after all those multiple warnings, if somebody gets frauded (which happens, because people get greedy, they pay a small amount to get a bigger prize, or a work from home job etc scams), police in some places now have IT Crime cell, which follows up with banks and try to recover the money. No guarantee. But there is no constant stream of fraud anymore thatln what happens here in US with people who fall for scams.

Your bank account isn't a personal wallet? It doesn't get much more personal than one's bank account for me.

I mean in India we call wallets to companies like PhonePe, PayTM etc. Banks are banks.

> There is a constant need of OTP for every transaction. That

Not necessary - My UK bank (Monzo) allows FASTER payments without a OTP (the UK version of this that has been around for about 15 years) via their app.

You just sign into the app, put in the bank account number you are sending it to, sort code and recipients name, it verifies you with Face-ID then sends the cash.

I awas replying in context of Indian people facing a constant stream of fraud, so I mean almost every money transfer transaction needs an OTP, which could be an SMS, or a number from grid on the back of the card, or from bank's own app.

The baseline level of payments fraud is through the roof in the States. I have never had a fraudulent transaction on any card or service in Ireland. In the US, it’s literally a monthly event. I have to actually check my statements for the fraudulent transactions. That’s not normal elsewhere.

That's not normal in the US either? Where are you banking?

I've had one credit card compromised in my life, and my bank alerted me before a dollar left my account.

My sole experience with credit card compromise was almost as good--there was one fraudulent charge, but the bank reversed it, canceled, and issued a new card before I could get a chance to notice it.

> In the US, it’s literally a monthly event

I'm calling BS. Virtually everyone I know has either had zero, or at most one or two experiences with fraudulent charges, and they're cleared up immediately with a phone call.

Fraud is still very much a real problem though (not just in the US). Maybe the circle of people you know aren't typical and actually take reasonable steps to protect their account details.

Are you going to a lot of gas stations and ATMs? This should be eliminated by not paying with card swipes.

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