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Comment by toomuchtodo | Hacker News Reader

https://news.ycombinator.com/item?id=36801491 (FedNow is live)

That looks like a US version of Faster Payments* (UK) or SWIFT (Eurozone) that enables instant wire transfers between bank accounts. I doubt very much it is suitable as an alternative to credit/debit cards for retail payments. For one thing, there's zero fraud protection, it's the electronic equivalent to paying for something with a cashier's check. For another, it's a pretty laborious process - you have to sign in to your online banking, enter the recipient's bank account details and the correct transaction reference, probably do some kind of 2FA.

For a third thing, while in the UK banks generally don't charge anything for transfers, the Bank of England charges a few pennies (£0.07 last I heard) per transaction. If people were routinely making several of those payments every day the way they do with cards, I'm sure banks would start charging fees.

* By the way, Faster Payments went live in the UK in 2008, but it still took a couple of years for all consumer banks to adopt it.

> I doubt very much it is suitable as an alternative to credit/debit cards for retail payments. For one thing, there's zero fraud protection, it's the electronic equivalent to paying for something with a cashier's check. For another, it's a pretty laborious process - you have to sign in to your online banking, enter the recipient's bank account details and the correct transaction reference, probably do some kind of 2FA.

It's already solved, just point your app to the QR code generated by the same terminal you use for CC.

Indeed, this is how Venmo works today for business payments and Zelle in general. It is a trivial implementation.

In Poland a lot of stores accept BLIK payments now which are instant online payments from your account. You open your banking app on your phone, it shows you the BLIK code, you give that to the merchant who types it on their terminal, then within couple seconds you get a popup on your phone saying "Merchant X is requesting payment of Y PLN, do you agree?" if you press yes then the payment is sent instantly to them, both sides get a confirmation.

It's also fantastic for payments over the phone because you no longer have to give anyone your card number/expiration/cvv(how this is still acceptable practice in UK is literally beyond me), the code is single use only and you see who you're paying and how much.

Good luck with cancelling this transaction for whatever reason, however.

Sure, but vast majority of day to day transactions that people make do not need this kind of protection - I don't need the ability to reverse my payment when buying groceries at Lidl or paying for petrol. When buying a laptop or a phone, I would use a normal card exactly because it offers certain protections - but most day to day transactions are absolutely fine with what is an equivalent of a direct bank transfer.

Britain used to have Paym, which would have made the process simple — except the banks never promoted it for business use, and barely promoted it for individual use.

In Denmark we have MobilePay, and similar systems exist in several other countries. I rarely use it in-person in businesses if I can pay with a card instead, but since McDonald's and Burger King both accept it I think it's popular with teenagers. I most often use it at very tiny shops and bars, who accept either MobilePay or cash.

The other comment about a small $5 transfer reminds me I recently paid 10kr ($1.50) for a cloakroom fee using MobilePay.

It varies depending on how much the business has spent integrating the system, but essentially you scan a QR code and swipe to transfer the money.

The lack of fraud protection isn't a big deal, as it's replacing smaller cash purchases.

(I also use it transferring money between friends, and sometimes when ordering online as it's a smoother process than paying by card.)

https://en.wikipedia.org/wiki/Paym

Paym had other issues as well - a given telephone number could only be linked to a single bank account was one objection iirc.

> I doubt very much it is suitable as an alternative to credit/debit cards for retail payments

It's used virtually everywhere in Thailand for small retail payments

In the UK you can still do things that way, but that's more common for paying bills etc, although it's a little less laborious than that.

For more casual usage, you can just use your mobile bank app to generate a payment request for a given amount, pass it to the other person (can do via QR code or link), it opens up in their own bank app, they click approve (or deny). It works pretty well between a variety of different banks, well I've not experienced it fail yet...

(There was also a payment system for a while that went via mobile telephone number, but it didn't get great uptake and was decommissioned after a few years).

Not in the US, so I may have misunderstood, but isn't FedNow for bank transfers rather than purchases?

No, it is also intended for purchases in the future. Shakedown is deposit to deposit accounts, alias support is coming soon (phone & email identifiers).

Walmart specifically submitted public comments on the topic in support of FedNow due to its payments capabilities. You don't need your bank to support it, using a financial services provider like ACI Global or Jack Henry & Associates is sufficient.

Last call at the interchange trough.

https://www.paymentsdive.com/news/walmart-kroger-eye-instant...

https://news.ycombinator.com/item?id=37168917

Yes. I don’t believe FedNow is designed to transfer $5.32 to the local coffee shop.

That’s what’s happened in Brazil with the PIX system. Same thing in Portugal with MBway. Starts as bank transfers then becomes the de facto way to transfer money.

Why not?

It's replacing ACH which is not available to "consumers", only employers. Maybe I'm wrong.

I use the ACH all the time. I can't do it directly, but that's just an artifact that isn't of much significance to me, given that various financial services company give me access to use it as I need to.

The same thing will presumably happen for FedNow.

Which bank gives ACH access to non-business accounts?

It's ACH access without being ACH. I can trivially transfer cash to my kid's accounts at other banks, and to/from my 3rd party savings accounts, all via ACH.

Likewise, PayPal and Wise (formerly Transferwise) provide it in the opposite direction: I can pull via ACH directly from my bank account.

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