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Comment by joshstrange | Hacker News Reader

Completely unrelated to this blog post but I really dislike Fintech saying "Get paid early" in their promos.

It's clearly marketing at someone too stupid to be able to see right through how utterly useless that is. If you are celebrating getting your paycheck 1 day earlier (every time) then your financial literally and financial health are probably in the toilet. They _must_ know they are preying on people with statements like that.

Then again, 90% of Fintech seems to be just a heavy layer of lipstick over an archaic system. Often with very little care of if any of the tools actually help people and more of a focus on how flashy or how much people think they are being helped.

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Though, in some cases (like when it's your bank saying it), it's usually just them frontrunning reliable (coming from a payroll provider) and predictable (getting paid the same time each month) ACH transactions with a near-zero likelihood of not settling, then crediting you the money before the ACH is totally settled, so not ALL cases are fintech gimmicks.

But most are, and unfortunately, as the proliferation of payday loans shows us, there is no shortage of desperate people and organizations willing to take advantage of that.

> not ALL cases are fintech gimmicks.

Fair and that's all well and good. I'm just saying if 1-3 days delay of getting your paycheck is going to have a big impact on one's life then I encourage one to reexamine their decisions, something else is the problem.

as a banker, when I first heard about that I did I wonder if they've modeled that risk correctly

it's the sort of thing that could probably wipe out their capital completely in a black swan event

It's a risk that was very much understood and it's fully covered.

I've heard that one before

I mean, it's been in production for years, has a cap of £20k and I'm pretty sure the design of BACS means it's very difficult to recall a transaction after the 4pm time when the feature becomes available. Simon is probably in a very good position to know how often that sort of thing happened, if ever.

I'm pretty happy with them offering this based on my understanding of BACS, as a shareholder.

20k... per account? adds up

I suppose most people won't have 20k (net) payslips, or draw it all out on pay day!

I'm not saying he's wrong, but covering a risk of this nature? I'm sure you'd be able to find someone to take your premiums

whether you'd be able to collect on it when needed, in the situation where the financial system is under serious stress is something else (see: 2008)

There's an ocean of historical data to predict reversal or settlement failure of ACH transactions.

I would guess that payroll credits are the second most-reliable category in the ocean of ACH transactions, right after US Treasury payments.

How black would this swan need to be to blow up this stability?

not sure what american payment transfers have to do with UK BACS payments, but ok

> I would guess that payroll credits are the second most-reliable category in the ocean of ACH transactions, right after US Treasury payments.

maybe some sort of lunatic getting control of the US treasury payment systems?

I suppose that can't ever happen

This thread is "completely unrelated to this blog post" and your previous comment was responding to comments about the US ACH network.

Right, but it's talking about "Get paid early" - and in the context of this particular post that's a specific Monzo feature that has absolutely nothing to do with ACH.

Do US fintechs offer something similar? Perhaps, but I bet it works pretty differently to BACS where the bank already knows about the money transfer.

Yes, "get paid early" is a feature that US fintechs and banks offer, and have for years. So in the context of this subthread, it's all about ACH.

The feature is based on the predictable pattern of payroll direct deposits, and/or a pre-settlement view into the ACH transfers for the day. The latter sounds like what you are describing for BACS, but I don't know the UK details.

Right, some banks will not post a deposit to your account until after a holding period. I deal with a lot of ACH payments, and despite a very strict schedule in the network, the retail customer-facing side is surprisingly unpredictable.

So the "post credit early" promise is not a gimmick, but the whole idea of being paid early is a gimmick. The next pay period is still a full period away, so any benefit to being credited early is literally a one-time, and probably just one-day thing.

Remember that Monzo is a UK institution -- ACH isn't relevant, and they can see the payment in flight if it's using BACS.

https://monzo.com/blog/2019/08/20/monzo-now-lets-you-get-pai...

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