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Comment by leokennis | Hacker News Reader

> outside the US consumer banking must be horrible or non-existent if its that bad the USA

When I read about US consumer banking ("cashing" cheques like its 1975, all kinds of ATM fees, credit scores and having to use weird "you are not really sending money real time but because the app you are sending the payment instruction through is legit you can sort of be assured the money will be paid eventually") and then look at the European payments landscape...I feel happy.

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It is a bit baffling how the US is so far behind on basically everything when it comes to money, banking and payments. I'm not sure many American's even realise how god awful their setup is.

Zelle works well enough for doing small (eg: only a few thousand dollars or less) instant transfers for free, and ACH works well enough for large transfers.

Our banking ecosystem is extremely fragmented with thousands of small banks and credit unions, we aren't like Canada where the 5 largest banks control nearly the entire market and can change things relatively quickly.

As a counterpoint, there are nearly 4,000 banks operating in the Eurozone. In 2017 a scheme was mandated by the European Central Bank for Instant Payments (actual funds moved between banks within 20 seconds) which currently most banks support, all banks can receive and which by October this year all banks must be able to send out.

It is possible in the US. But somehow it's not happening.

Don't forget that Instant Payments are free.

Terms and conditions apply there.

Like what?

Not every bank supports it yet, and it's not always free. Some offer a limited number of free instant payments. One of my banks charged 1eur per instant payment up until recently. I understand the situation is improving, however.

> One of my banks charged 1eur per instant payment up until recently

Illegal since 1 January, which is why they stopped. Hence why I'm saying it's free.

As for not all banks supporting it, if I'm not mistaken it will be mandatory by the end of the year, and the majority already do.

I think of it as second mover advantage. The US basically has the first system that worked. And in terms of the expectations of the 1960s, it works really well. But, because it works “good enough” there is very little incentive to make it work better… or to the level of “better” in 21st century terms. And because we’ve lived with this system for so long, all of the fees and charges have largely been internalized, so we don’t question their existence.

I'm not sure that's a good excuse. Most Western European nations adopted the same systems shortly afterwards, and had the same type of legacy (cheques, fees all over the place, slow transfers)... But they haven't stopped there and have kept innovating and modernising. A big part of the innovation, which many Americans will hate to hear, has been enforced by the EU. Fast (seconds) and free transfers, as well as low card transaction fees have all been forced by EU laws and regulations. The banks would without a doubt prefer to be making more money from those things, but nobody is asking them.

The first system that worked? I have no idea what you're talking about. Whatever system US banks have, they weren't first, and it barely works. I mean Credit Cards are mostly an American invention, sure. But you've been lagging behind on chip&pin and contactleas payments for decades. Even something as simple as a secure bank transfer is a chore over there. I remember asking an American for their account number so I could pay them, years ago, and they assumed I would use it to rob them. Primitive nonsense.

Your banks are robbing you, and no one seems to care.

That's what they were saying. America had the first credit cards and therefore had trouble moving to chip & pin partly because the existing system worked without it.

That makes no sense. The rest of the world also had the existing systems and moved on relatively quickly.

The issue is that the US banking system is highly fragmented, making universal change difficult. Most other countries have fewer, larger banks (which does introduce other problems that regulation has to be active with), but it means that they can gather together and agree on standards far quicker. Most other countries also have more active regulation pushing universal standards than the US historically did.

The US credit card system is not highly fragmented - there are just 3 big players and maybe 2 smaller players. There are tons of banks but that's not an issue for chip and pin. Anyway Europe also has a fragmented bank landscape.

> Your banks are robbing you, and no one seems to care.

Actually I think they do care. That's why they are still using paper checks, because those are processed for free :)

You are way out of date on what the us is like. Chips are all anyone uses in the us. I write about 2 checks a year.

not that it makes a difference - us law puts the liability on banks. Chip and pin is needed in backwards places where a stolen credit card is the consumers problem. It adds no security to the individual in the us. When banks decided to care chips got rolled out. They don't think pin is useful enough to be worth the hasstle so we don't have the.

>I'm not sure many American's even realise how god awful their setup is.

The vast majority of average americans don't leave the town/city/area they grew up in. They have NO CLUE what the world is like, other than what they glean from hollywood, and "American exceptionalism" is an absurdly effective propaganda campaign.

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