L4sBotFed’s new instant payment system could be trouble for PayPal, Venmo
MuddybulldogWhile I’ve used PayPal for, holy shit, decades… my recent need to move cash around with my Gen Z children caused me to venture into Venmo and CashApp. While I’m skeptical of the proper execution of anything new the federal government introduces, I can’t imagine they could create a WORSE experience than these new-age, middle-man processors. I’ve had to call my bank more times in the last two weeks to unlock fraud alerts than I have in the past twenty years.
MuddybulldogWhile I’ve used PayPal for, holy shit, decades… my recent need to move cash around with my Gen Z children caused me to venture into Venmo and CashApp. While I’m skeptical of the proper execution of anything new the federal government introduces, I can’t imagine they could create a WORSE experience than these new-age, middle-man processors. I’ve had to call my bank more times in the last two weeks to unlock fraud alerts than I have in the past twenty years. Then, after doing that, the damned processors themselves start declining $5 transactions for no apparent reason. I’d sooner poke myself in the eye than try to make a payment.
Venmo is owned by PayPal.
BombOmOmWhile that is true, I have also had issues with Venmo that I have never had with PayPal. I have no clue what the back-end difference is, but I stopped using Venmo after they decided a small payment to a friend was suspicious and locked my account. Meanwhile, payments to that same friend via PayPal have been fine.
I’ve been locked out of my PayPal since 2005. On their end my account is somehow both locked and nonexistent, creating a loop of error messages. Last time I tried to have a real human fix it they basically shrugged, and that was about 7 years ago haha
This is wild. Here in the UK we just transfer money from bank to bank in an instant using the banks own app.
How long has it been that way? We’ve never had that here in the states…
It’s so normal that I can’t actually remember it ever being any different. Even before the advent of mobile banking it was the same with internet banking. Instant transfers.
I do this in the States. Maybe you haven’t noticed the option on the bank’s site? Also make sure to use a credit union.
We have Zelle which is free and instant, but it’s still a third party your bank integrates
In Australia we’ve had free next business day transfers for as long as I can remember. Decades.
Transfers that clear in seconds are a relatively recent addition. It didn’t happen overnight, it happened gradually as bottlenecks were removed from the infrastructure. Some transactions were instant a couple decades ago, but it’s only in the last few years that most transactions are instant here.
Preußisch BlauSame here in Canada, e-transfer with 0 fees is pretty normal.
It’s been a while since I did it but you can authorize it so all e-transfers are automatically accepted and deposited. I can’t think of a scenario where that would be a bad thing.
Yeah, I have auto-deposit enabled.
And I assumed it was the same everywhere!
Here in the US it’s only instant if it’s coming out of your account.
If it’s coming out of the bank’s account it will take 7-45 days and require a 35 dollar processing fee payable only in person and must be cash.
Don’t forget about the 4.99 bank fee and 3.99 convenience fee.
Would you like to add 25% or 35% gratuity today?
Please round your transaction to the nearest hundred dollars to donate to starving babies and the bank will match your donation up to 3 cents.
What bank do you have that charges $35 for a transfer?
I transfer between b of a and chase bank, both known for having decently high fees, without any of those fees.
The $35 amount I’ve only seen with overdrafting. Do you overdraft every single transfer?
Pretty sure it was sarcasm.
Which part? The fees?
jeffwBruh… the entire comment. 7 to 45 days… really? Gratuity… in a bank app?
No one said anything about banking apps, bruh…
“Overall, the average time to close on a mortgage – the amount of time from when the lender receives your application to the time the loan is disbursed – is 52 days, according to Ellie Mae. Conventional loans had the shortest turnaround times at 51 days, followed by FHA loans at 55 days and VA loans at 57 days.”
We’re talking about wire transfers, not closing on a mortgage. They take 3-5 days. I pay my loan to Rocket every month
“We” are not.
You are.
No, the entire thread is about wire transfers lol. There’s nowhere on Earth where you can close on your mortgage instantly
Here in the US it’s only instant if it’s coming out of your account.
If it’s coming out of the bank’s account
Can you please explain the difference here, because that doesn’t make sense to me. When am I ever transferring money out of the banks account instead of mine?
My comment was worded in an intentionally inflammatory way for sarcasm and humor. Poking fun at this pester charging for everything culture.
To answer your question though.
The point of view of the leveraging bank money, a loan, credit, refund.
To be fair, general banking has gotten a lot faster in both directions. So my snark is marginal at best.
Ah ok, all good. I guess it’s showing how bad the state of affairs is with payments in the USA when I had to ask that question haha.
This is what banking looks like if you are poor, unfortunately.
Those cash checking places are fucking evil. Then the payday loan companies with usury…
Yes, but in the US, everything has to be extra shitty than other places that don’t have as much wealth as us for some reason, so banks don’t have functional apps to quickly move money around. You can do ACH transfers, which work, but are only designed to clear within a couple days, not minutes.
We all know that “companies making money” is the reason
Same with us. I don’t know what these other folks are talking about. I transfer seemlessly between my accounts at different banks.
In Spain we have Bizum - transfer money using a persons mobile phone number (as long as you’re both registered with your bank). Instant and free
Same in Poland. That, and Blik system which let’s you send money to a phone number (if it’s also registered with Blik) and it’s actually instant. Not “next transfer window” like Elixir transfers, instant.
And yes, completely free.
The US has this, it’s called Zelle, every bank seems to have it, and it’s instantaneous. For some reason it’s just not popular, probably because Paypal and others are already entrenched.
PyrSame in Canada. It’s like going back in time when crossing the border when it comes to banking and payment.
Welcome to 2003!
-Signed: Canada.
SlowyFor real, we’ve had e-transfer forever…
We had bank to bank and bank to merchant over the internet in 1996. And by 2003 the interac e-transfer for customer to customer had rolled out countrywide.
The history is actually pretty impressive.
Wait. US banks don’t have e-transfer???
Yeah we’re in the fucking stone age over here. No federal e-transfer, all private healthcare, practically no public transport besides in some of the bigger cities, and even that isnt very good most of the time. Also still using imperial, way behind on a lot of tech legislation, basically relying on EU rules to carry over. There’s a reason we’re the 3rd world country of 1st world countries
- Laughs in Indian UPI
UPI is the best mode of payment. I doubt anyone can change my mind.
spidermanUPI and ONDC are two great things that India has. The latter still needs lot’s of development and attention though.
I would add Digilocker as well. Completed removed my need for a wallet. But it’s not as great as these 2
yeah they are great but i always tend to carry a government id in the wallet since i kinda don’t trust my smartphone’s battery life. that goes same for a upi, i use it everyday but i always have a debit card incase if the bank server doesn’t work or battery dies out
Lol makes sense
Here in the US it’s only instant if it’s coming out of your account.
If it’s coming out of the bank’s account it will take 7-45 days and require a 35 dollar processing fee payable only in person and must be cash.
Don’t forget about the 4.99 bank fee and 3.99 convenience fee.
Would you like to add 25% or 35% gratuity today?
Please round your transaction to the nearest hundred dollars to donate to starving babies and the bank will match your donation up to 3 cents.
For those that don’t know in the US even if you use a third party system the final settlement of the money still has to go through the Fed and it’s usually as either a Wire or an ACH transaction. ACH is slow and batch processes which can be daily. Wire can be quicker but more expensive. Some banks give you access to funds sooner but it’s still not settled until that NACHA batch file goes through the Fed.
Anyway there are two instant payment systems coming to the US: RTP (by the Automated Clearing House (ACH)) and FedNow.
Outside the US they’ve already had other instant payment systems.
Yes after a decade of living in Europe I can only say, “fucking finally!”
Thank you for this, because as an Australian I was quite confused. We have had “instant” payment systems for as long as I can remember between banks.
This didn’t kill things like PayPal though, they’re completely different services.
If the money is going from a PayPal account to a PayPal account, why would it have to clear at all?
Word to the wise: if you are buying a house in the USA, make sure that the transfer of funds to the closing attorney/settlement agent is done by WIRE transfer, not ACH. ACH is reversible, and in many jurisdictions, the closing shop is not allowed to accept ACH transfers. Wire transfers are more of a pain in the ass, but you don’t want to find out on closing day that your money is no good because you could make it disappear from the closing shop’s trust account two days after closing.
Run by the feds…yea what could go wrong there.
Thank god. I very much so dislike having to use 3rd parties to transfer e-bucks. Always have to do the ‘I have x, do you have x?’ dance. Been using cash fairly often since it’s just easier.
Honestly, once it reaches critical mass. It will mean the end of PayPal, Venmo et al AND the credit card industry as a whole.
I doubt it will hit the credit card industry that much. We have something like this in Canada, Interac, and credit cards are alive and well. They may actually prefer this, because people who keep zero balances may be less inclined to use credit cards instead of debit cards and there may be a larger market of businesses with card-processing capability to cater to those who have debit cards but don’t have the credit to obtain credit cards.
We have something like this in Canada, Interac
Interac is not the same thing at all, the US equivalent is Zelle.
FedNow does instant EFT payments, which is something Canada does not have.
I think between rewards and actual credit, credit cards will probably be fine, but I’m curious if you think this solves for either of these use cases.
Yeah I’m failing to see how this replaces either of those benefits…
I can see it going either way. I think it’s gonna come down to apple and Google getting on board. If they adopt tap to pay with this system vendors will have less incentive to accept credit card fees. If they don’t, it won’t become ubiquitous enough for any store to get away with not allowing it and consumers will look out for their own interest to keep taking the credit benefits. (I realize collective action would make that argument void, I doubt true collective action is possible in any senecio.)
That said, I cannot see a world where the banks let it get that far. This system relies on the banks cooperation and it wouldn’t be the first time they bought a law.