Hacker News Reader

Comment by gnicholas | Hacker News Reader

When my older relatives wanted to send money to family/friends, I used to recommend Zelle, which was better than the never-heard-of-it apps they were considering. But with all the problems I keep hearing about Zelle, they're off the list. Most of them have iPhones and so I just tell them to send cash via Messages/Apple Cash. I don't know how reversible that sort of thing is, in the case of fraud, but as long as they can see the messaging history with the person before they send it, it seems like that's a pretty low risk.

Any other suggestions for older adults?

View on HN

I no longer recommend Cash App (formerly Square Cash) because they explicitly removed the ability to have inbound transactions be automatically deposited into your bank account.

They left it on for anyone who already had it on, but I specifically signed my dad up on the assumption that sending him money would be as frictionless as possible. Instead, Square/Block would love for that money to stay in the Cash App account, not actually available for him to spend in his own account.

I continue to use Cash App because I continue to have this feature; if they ever remove it, I'm gone.

I got burned by the Cash app as well, with bait-and-switch tactics around their merchant discounts. Their system had problems registering merchants correctly, so the discounts pretty much never went through for me. I tried to get support but they didn't care. I bounced.

I don't actually blame them for this, because they have to make money somehow. If they make money by having your money in your account for a few hours/days, idc.

So long as they make it frictionless to start a withdrawal - a tap or two, that's all I ask.

I do blame them for this - they can get fucked.

For my dad, Auto Cash Out was exactly the "frictionless" experience he needed, and he didn't need any of the BS Cash App wants to put in front of him.

I'm happy to help Square/Block make money with my engagement/interaction with Cash App, but they clearly can't figure it out without severely harming the UX in the process.

Therefore, they aren't recommended.

Brit here- I usually send money to friends and family using bank transfers with internet banking- it’s instant, there’s no fee (AFAIK) and all you need are someone’s account number, and sort code, which everyone has.

Is this just not an option in the states? It’s insane to me that y’all use (need??) third party apps for something as simple as sending money around.

> Is this just not an option in the states?

Correct.

We also still use paper checks fairly extensively, and chip/NFC cards are a recent advancement.

There are a few bank-to-bank mechanisms (ACH, wire transfers) but they're slow (often multiple business days) and often have fees associated with them ($20+ for wires).

The lack of good transfer mechanisms is what has led to a proliferation of alternatives (e.g. Venmo, Cash App). Zelle has emerged as a bank-approved mechanism for "instant" funds transfer.

In the USA, sending a wire transfer is usually $15-$20, and some banks charge $20 to receive a wire transfer.

> sending a wire transfer is usually $15-$20

Will note that there are banks that offer sending and receiving wires for free.

Wow, did not realize that banks also charge for receiving incoming wires, but most of the big guys charge around $15: https://www.nerdwallet.com/article/banking/wire-transfers-wh...

And an additional fee it's it's 'overnight' and another fee if it's international.

Then they do a three-way call between the parties and the banks to verify the transaction.

Really? I've had wires come in over the years and never participated in a conference call.

> had wires come in over the years and never participated in a conference call

Same. That said, if your transaction history is sketchy (e.g. large cash withdrawals following international wires) or the wire is coming from or going to a high-risk place, e.g. Russia or Turkey, your bank may opt to do this as an anti-fraud / anti-money laundering measure.

Sending an ACH is nearly free, banks just don't expose it because of the very poor experience when you get one of the numbers wrong. You can ACH people all day with Transferwise.

Zelle is basically the US attempt at instant bank transfers. You can set it up and use it through your participating bank's app or through their online portal.

This is possible if both people use the same bank (Bank of America, Wells Fargo, Chase), but even with the relatively consolidated finance sector, the odds of this are not super high.

> Is this just not an option in the states?

They are working on it: https://www.frbservices.org/financial-services/fednow/about.... should be available this year. Once it's up Zelle, Cashapp, etc will not be needed anymore.

Wow this is the first I've seen of this, amazing it hasn't come across my radar. Seems like a major consolidation, tied closely to a government institution (or whatever the FRB technically is).

Can you explain what you mean by consolidation? It's essentially a standards-based collaborative approach not unlike other large payment networks like in the UK, Europe and India.

Apologies for the armchair commentary. "Consolidation" meaning commerce regulation and oversight more tightly consolidated than possible with technology (including paper notes) currently used.

> ...standards-based collaborative approach...

You have not said this explicitly, but for myself it is notable that this is not peer-to-peer, with both parties collaborating based on a standard. Instead it is clearinghouse. Unlike peer-to-peer standards, this would give the Fed Reserve at least a large dataset or at most a large control lever. From the linked article:

> Through financial institutions participating in the FedNow Service... > Consistent with the Federal Reserve’s historical role of providing payment services...

Of course it's not peer-peer. Therein lies a lot of potential for fraud.

Do you have an example of a p2p system that doesn't show all the fraud issues rampant in modern crypto?

I believe FedNow is the US implementation of FasterPayments which we have had here in the UK since 2008, and what the parent is referring to.

https://en.m.wikipedia.org/wiki/Faster_Payments

FedNow is no different from Zelle; it seems to me banks could still mess it up, and most of the complaints here (that you can't reverse a transaction you sent) would still apply to it, since that's kind of the point.

I would wait and see. It's not like they're ignoring fraud management:

https://www.pymnts.com/news/payment-methods/2022/fednow-pilo...

"FedNow Service features will help participating financial institutions conduct investigations and provide returned funds connected to fraud and errors. Beyond mitigating fraud through the design of the service, Stanescu noted that the Fed is exploring opportunities to collaborate with the industry on consumer education and outreach programs to help identify and prevent scams and promote strong enrollment and authentication processes. In the meantime, the value proposition inherent in irrevocability remains intact: receivers have protection and a guarantee that good funds have hit their account and can be used immediately."

I disagree - it seems a lot more like SEPA in Europe. The non-reversibility seems similar to SEPA fast transactions (ie, similar to fedwire) as well.

The fact that they're using ISO20222 is also a clue that they're probably picking up best-practice from European and Asian networks.

My biggest complaint with Zelle is my bank helps me by including Zelle in my bank account with easy setup. Some banks it's just included. I'd like a hard lock out on it.

Zelle, what they're complaining about here, is that. It's not a third party app.

FedNow is scheduled to come this year and provide instant money transfer. We already have delayed money transfer services run by the government.

Zelle is just a private sector solution since the government hadn't built it out yet.

Yeah, the USA is way behind many other nations here. Exercise left for reader as to why.

It wont be a popular answer here but Facebook Pay now Meta Pay is a great product. It is instant, as in, you can send someone standing in front of an ATM money, and they can pull the money out seconds later. Not pending, but completed deposits. For free.

It is the "it just works" way to move money between peoples debit cards in the US. It is rock solid, a large network of us use it all the time, and it is significantly more frictionless than Paypal/Venmo/Cashapp/Zelle when you already talk on Messenger. 4 clicks and the money appears.

Oh that's pretty cool. It looks like there are no fees for the service (at least for now), where Venmo has a 1.75% fee ($0.25 min $25 max) and Cash App has a 0.5%-1.75% fee ($0.25 min) for the same instant withdrawal service.

It also doesn't require the banks cooperation, and has pretty high limits at 10k per transaction, and per month. Basically facebook fronting money because it believes it can trust the profile.

I suspect the personal side of it will remain free. It's a gateway drug to having your card on file. Then there is less friction when you see something on marketplace you want. They can recover money on the marketplace side of things.

The bank does need to cooperate to accept the transaction "instantly", but mostly they do since it's good for them.

PayPal/Venmo/Apple Cash also support instant transfers through this method - basically it just charges a negative amount to your debit card. It's not always free though, and most people don't actually need "instant" unless they're standing in front of an ATM.

is it free anywhere else?

Most other countries, sure. I don't know how their other fraudoffs like fraud protection work.

same minute banking transactions between checking accounts are free in most countries?

Meant to say first world countries…

Does Meta Pay have a checking account as part of each account that you can withdraw from directly via an ATM? Or does Meta Pay need to transfer the money into a 3rd party checking account that you can then withdraw from? That second step may not be instantaneous, depending on which bank the account is at.

there's no account. its just your checking account. and their checking account.

facebook fronts the money, deposits it as a non pending transaction. then it takes your money.

ive done it with multiple people at multiple banks. its never been more than minutes.

Good to know, that is pretty useful for immediate transfers. I've done transfers between accounts at the same bank before, using their own website, and it still takes like 24 hours to leave 'pending' state.

I heard the feds are working on a similar system called fednow:

https://www.federalreserve.gov/paymentsystems/fednow_about.h...

I've never recommended Zelle. Tales of their complete lack of customer service, consumer protection, and unwillingness to be held accountable are not new. ACH is archaic (and has its own dangers e.g. pull transactions) but it generally works.

Consumers can't initiate ACHes so it doesn't compete with Venmo/Zelle/etc.

False. Every time you transfer money from an account at one bank to another you're using ACH. Same with moving funds from banks to stock brokers or brokers to banks.

The real reason it doesn't compete is its slow, and many banks have terms of service that say something like "You can only set it up between accounts you own" so sending to other people is often technically a violation of your agreement with a bank.

Some banks don't have a way for a customer to initiate an ACH, unless maybe calling them. Nothing in their app or website for it.

> and unwillingness to be held accountable

I believe that one of the design considerations between the banks that developed Zelle was specifically to move more liability to the customer for fraudulent transactions.

I use Google Pay with my wife and it works great. Never had an issue.

Reply on news.ycombinator.com