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Comment by kelnos | Hacker News Reader

> So presumably they are interested in offering consumers the ability to pay for Netflix using FedNow instead of a credit card.

I do wonder how stuff like this will shake out. I will use a credit card, always, with any vendor that doesn't pass along credit card fees to the customer in some way. (Why would I choose otherwise? The credit card gives me rewards, and better fraud protection.)

But more and more, I see companies charging "convenience fees" for credit card usage or offering "discounts" for cash/debit. Hell, T-Mobile just started requiring you not use a credit card to get their $5/mo autopay discount.

So this is all cool (and perhaps would make it easier for people who don't have a credit card to pay for Netflix), but I don't see why I'd use anything but a credit card to pay for my Netflix subscription, unless they offer discounts for using FedNow. Which... they probably won't?

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RFP i.e. Request for Payment is not part of this release. Furthermore there is no ETA from the Fed as to the release date for RFP.

Currently FedNow is simply a push payment system i.e. bank account holder may be able to use FedNow to push money out from their bank account to someone else's bank account.

The limitation here is the bank account holder must know the account number of the recipient. This is a huge limiter in adoption since most people don't want to share their bank account numbers and maintaining a directory of people's bank account numbers is cumbersome to say the least

Yes, the Fed is working on a directory but they have not yet announced the launch date for such a directory, not have they mentioned the index i.e. will it be phone number ? email ? something else ?

Bottom line: FedNow launch: Step in the right direction but still a long way to go

> most people don't want to share their bank account numbers

While far less common these days, people gave this information to arbitrary payees (via personal checks) for decades. The idea that it's not to be given to payers, despite it having been given to arbitrary payees, seems misguided. If someone tries to commit fraud with that number, they're probably going to get caught, making it sufficiently unlikely, no?

Seems to me a big part of why something like this should exist is so personal checks can just die, as they should have years ago.

Crappy usability, no security, abysmal throughput and latency.

When I first came to USA as a tourist in 2011, one of the most amusing thing I witnessed was at a party at my Couch Surfer’s host when a friend of theirs payed back a debt by writing them a check. This cranked me up, as I had not seen a real world check in use since I was a kid in the early 1990s. I was equally surprised to learn how nobody else at the party thought anything of this. Coming from Iceland where you simply transfer them money via a bank app (or a website back then), this was my first American culture shock.

Now I live in the USA and I actually use checks all the time. I get paid via a check, I pay with checks at my local farmstand, I used to pay my rent with a check, my immigration fees were paid with a check etc.

This is orthogonal to the original point. Passing around your checking account number isn’t that big of a security risk. We do it now and banks have built guard rails in place because we do it now.

Checks are easy to use: just write a name and an amount on a piece of paper.

They’re secure: they can only be cashed by the person they’re made out to (unlike cash).

They have theoretically infinite throughput: you can write any amount on a single check.

They have extremely high latency, which is why digital payments are being preferred in many situations. But the remaining situations where checks are used high latency is acceptable or even desirable.

> Crappy usability

Speak for yourself. In my book, paper wins the usability front over apps, because apps suck and have too much personal administrative overhead.

Australia's "PayID" system gets around this by allowing you to pay to a mobile phone number or email address (generally findable via your phone's contacts). The implementation is a little clunky, but an additional benefit is that it's a bit like DNS for your payments - you can associated those details with different bank account to redirect payments if you move.

I’m going to lose $30 a month in discounts with T-mobile if I don’t switch to debit card or checking account. T-mobile has a horrible history when it comes to security. I definitely don’t want to give them access to my checking account

Create an account just for T-mobile. With someone like Fidelity setting up a new account is a few clicks. Ally makes it pretty easy too. Then set it up to fund automatically from another account within a certain limit. Or if your monthly bill is stable, setup a schedule to fund it monthly.

What are the rights of the T-mobile customer in the USA, if they somehow do mess up an automatic bill payment?

I'm searching using the European/international term for this sort of payment ("direct debit usa") which gives me API documentation from many American payment providers, but nothing about the customer's rights. I assume it's the technical term there, and there's another term used with the public.

(In Britain and the EU this kind of bill-paying agreement has very strong rights for the payer, they can ask their bank to reverse any transaction for a long time without giving a reason. My online banking interfaces have easy buttons to do this, or to block future transfers.)

I’m not sure about ACH (directly from your checking account) rights. But, debit cards issued with the Mastercard, Visa, Amex logos give you the same rights as credit cards. Where you can get the charge reversed.

However there are a lot more knock on effects while you’re waiting for actual cash to be put back into your account than there are when you’re just waiting to get a credit card transaction reversed.

Not only can they potentially drain your checking account. They can also drain any linked Savings account that you have to cover overdrafts.

I only keep $500 in my linked Savings account to cover any of our accounts.

ACH has many of the same consumer protections as credit card networks. The window is 60 days instead of 90 days and the dispute outcome is always in your favor—merchants cannot respond to the dispute or win.

What do you mean by "cannot respond to the dispute or win"? Is there some documentation of the rules/laws for a layman?

You can easily create an account just for T-Mobile and auto-deposit into it monthly.

But then they wouldn’t have anything to complain about.

I still don’t get the phone warranty that comes by just charging the bill to my Amex card (potentially saves about $500 a year) or the close to 5000 Amex points per year (worth about $75)

Right, but that phone warranty and 5000 Amex points is being funded by T-Mobile paying CC processing fees

"Hell, T-Mobile just started requiring you not use a credit card to get their $5/mo autopay discount."

Yes. Visited a T-Mobile store to set that up. Brought in a voided check. Said "Set up an ACH transfer, please." "What's an ACH transfer?" Took about half an hour, two rejects from the T-Mobile payment system with both me and the clerk checking the numbers, and a conversation with Bank of America customer support ("We didn't reject that, we won't see it until the daily batch.") Too many people are going to be paying T-Mobile a $60/year "convenience fee".

(Worse, BofA is apparently still charging for outgoing ACH transfers. And they're not on FedNow.)

Yea BoA is not the most consumer friendly bank. I specifically have checking accounts with 4 different banks to capitalize on the various services they all offer, and to avoid being caught by a bank run type situation (or even just a bank’s services being down for a technical reason).

I am looking to move as well. What bank would you recommend for a checking account from the ones you have used?

If you’re looking for a large bank that has a large physical presence, I like chase more. They offer more services than BoA for free, though they don’t have a totally fee-free checking account (unless you have monthly direct deposits, or will maintain a minimum amount of money with them). Their website is much much better and honestly their cc offerings are better.

I was never a big fan of any of the smaller credit union websites. A lot of stuff still required either going into a branch or hanging out on the phone, though here’s the one place they’re almost all better: you’ll never talk to someone overseas with a local credit union, often tech support will be a real life unix greybeard, who you’ll appreciate talking to once you provide the right shibboleth. But everyone else will most likely be branch employees manning the phones when they’re not busy in the branch. So if you’re ok with needing to talk to people to perform a lot of stuff the bigger banks offer web services for, a CU is definitely a more personal experience.

If you’re ok with no physical presence, discover is a pretty good option, totally free checking, and last time I checked they gave checks for free. I got like 500 almost 10 years ago and haven’t used more than 50, so idk if this is still something they offer but it sure is nice not worrying about inning out of checks or needing to pay for them.

Go for a local credit union.

"any vendor that doesn't pass along credit card fees to the customer in some way"

I think every vendor passes along the fees, either in aggregate through pricing, or to the individual as a charge. At least in the latter case it is more transparant and fair to non cc users.

I moved to Europe in 2018. The banking system is decades more advanced than the US. At least where I am, no restaurant will “split a check” and one person is expected to pay. We settle the bill between each other in a matter of seconds.

Most bills are paid using this exact system. Credit cards are very rarely used except in-person. Since you have to accept (or tell your bank to always accept certain vendors) debits using this system, there’s never any surprises. You usually have nearly a week to accept a debit.

Inability to "split a cheque" is still a very annoying limitation; completely normal behaviour to do this in NZ, still moderately weird in Australia (although it's got better).

The ability to resolve this electronically rather than with cash makes it less bad, but still easier and faster to resolve it in store.

The GP shouldn't be generalizing across Europe with that statement. It's somewhere between completely wrong, half wrong and correct depending which of the 50 European countries are included.

>Credit cards are very rarely used except in-person

Credit cards give you reward points/money so that's not really a positive.

That depends on the country the card is issued in.

Credit card fees that aren’t passed through to you are a bit tragedy of the commons. Probably good for them to go away. It’s fine if you choose to pay them, and it’s still worth it to you, but otherwise you’re forcing everyone around you to subsidize your credit card rewards. That’s not fair.

Alternatively, everyone not taking advantage of the credit card protections isn't taking advantage of what's offered around them. Everyone should be subsidizing everyone else, because no one should be using a debit card to make direct consumer purchases in 2023. It's too fraught with risk comparatively, and even the scummiest of the sub-prime credit cards give you a grace period to not accrue interest.

It is relevant that credit cards with good reward programs are more accessible to wealthier people, meaning that both people who don't use credit cards and poorer people with inferior credit cards are subsidizing them.

Even some secured credit cards offer rewards

https://www.cardrates.com/advice/secured-cards-with-rewards/

This argument makes sense if you don't consider the large portion of the population for whom credit cards are unavailable.

There's even a significant number of people in the US for whom bank accounts are unavailable. Hacker News really is an ivory tower in many ways.

4.5% of the American population is not exactly a “significant number of people”

https://www.fdic.gov/analysis/household-survey/index.html

I’m not saying we shouldn’t do anything for that 4.5%.

But almost anyone who has a bank account should at least be able to get a secured credit card

> 4.5% of the American population is not exactly a “significant number of people”

Wow. Absolutely stunning.

I don’t have much to say other than “yes it is”

> 4.5% of the American population is not exactly a “significant number of people”

Yes, it is; its 15 million people in the US, more people than any state outside of the top 4.

4.5% of the American population sounds like an _extremely_ significant number of people tbh

You've been an excellent example of my point, thanks.

No one? That's a rather brash statement to make. Here in Ireland I can count on zero hands how many people use credit cards on a day to day basis. Debit cards are the norm in much of the EU I would assume.

Credit cards are pretty common here in AU; I don't care so much about the fraud protection, but up to 55 day interest free periods are common (if the bill is paid in full each month) and so the cards literally save me money because I earn interest on savings and/or don't pay interest on mortgage vs having to pay everything immediately.

Rewards on top are an added bonus.

To me I feel the money Id save on using the credit card is so infinitesimally small that it’s easily worth it to use debit for the ease of mind that everything is settled and I truly can afford everything I pay for. I also hate credit card rewards programs with a passion because they just complicate our lives to get back money that should’ve just been lower credit card fees to begin with.

The argument that you save interest on savings account doesn’t make any sense at all because I count my credit cards towards my emergency buffer. If I maxed out the credit card I would absolutely make sure to keep more money in my savings account.

I get that it’s different for people living paycheck to paycheck. But arguing that credit is a solution for the poor is a slippery slope. We should solve those problems other ways.

I use cc for literally everything but car payment and mortgage and pay off every month. The only time I pull out my debit card is to get cash out. I feel peace of mind that nothing is going to drain my bank account fraudulently, I have one bill per month to look at, and I end up with 1-2 vacations (hotel and flight) for my family each year. Seems like a pretty good deal to me.

I'm not arguing it's a solution for the poor, the absolute opposite - because I have sufficient income to pay my bills in full it just comes out cheaper than paying them with cash. It's a terrible solution _if you actually need credit_ because it typically comes with really bad interest rates.

You come out ahead because the card issuers expect to make money from you because you'll stay with them a long time so offer substantial sign up bonuses (I don't) and that you'll pay interest (I don't). There are generally annual fees, but if you ask they'll often waive them (if you spend enough, again not accessible if you're living pay to pay).

It's ~effortless (bills paid automatically in full from a mortgage offset account) and saves money even without rewards and other perks (0% loans via interest free "balance transfers").

You can get a 2% cash back rewards card and literally receive 2% of every dollar you spend back, deposited electronically in your bank account whenever you press a button on your credit card website.

They are.

> …isn't taking advantage of what's offered around them.

is that not an absurdly slippery slope?

what if rather than anyone having to take advantage of anything, things just worked better, and everyone agreed that such things matter?

Everyone agreeing to not conduct financial crime would be nice, agreed, but there would be no societal need for common law and court mediated legal relief.

In lieu of that, how would you envision any society arriving at such an end state?

by starting

Starting is necessary but not sufficient to arrive at a durable steady state. Sorry, that isn't good enough.

who said it was?

Then we would live in a high-trust society, like the United States and Europe used to be 100 years ago. Or like Singapore is now.

But we don't, and never will again, for very complicated reasons.

> Then we would live in a high-trust society, like the United States and Europe used to be 100 years ago.

The United States didn’t even “trust” Black folks enough to allow them to drink from the same water fountain, live in the same neighborhood, go to the same school or be part of the financial system as late as the 60s.

Cool, now follow this logic and do health insurance right

The failure in your logic is that different credit cards do have different fees and that some form of consumer protection should apply to debit cards as well

... umm, no, at least in my experience. I happily ordered stuff online for years from many merchants.

I want banks and stripe and gateways and shopify and visa/mc to weed out bad actors fast.

and if some small shop starts to transact a lot, let them manage their risk, don't require consumer side credit for this.

there's already a ton of data, endless kyc/aml paperwork put on consumers and banks/gateways they should figure it out, and if someone still insists on paying hundreds of thousands on totally-free-bitcoins.top after the bank, the app, the browser, their neighbor warned them then let them. and let them try a chargeback.

Interesting, most credit cards with rewards I have seen in Aus have substantially higher interest rates which is where I assume they capture the cost of rewards back. Is that not the case in the US?

As for fairness, I agree they should go away. Companies with margin can swallow the fee, companies without could be unprofitable and make no sense if they don't pass on the fee. It's a practical reality of the dollars and cents, but it is a private apparatus we opt into so I guess we can't complain that much.

It’s no more tragedy of the commons than any other priced in offering a company does.

Don’t take advantage of “free delivery” because you buy in store? You’re paying for it anyways.

Don’t care about the ability to return for full refund because you changed your mind? You’re paying for it anyways.

Don’t care about the ability to link your washer to your Wi-Fi and use an app to see if your laundry is done? You’re paying for it anyways.

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