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United States The Almighty Buck

Fed Digital Payment System To Launch in July (cnbc.com) 37

Posted by msmash from the shape-of-things-to-come dept.
The Federal Reserve's digital payments system, which it promises will help speed up the way money moves, will debut in July. From a report: FedNow, as it will be known, will create "a leading-edge payments system that is resilient, adaptive, and accessible," said Richmond Fed President Tom Barkin, who is the program's executive sponsor. The system will allow bill payments, money transfers such as paychecks and disbursements from the government, as well as a host of other consumer activities to move more rapidly and at lower cost, according to the program's goals. Participants will complete a training and certification process in early April, according to a Fed announcement.
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Fed Digital Payment System To Launch in July More

Fed Digital Payment System To Launch in July

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  • Here we go! (Score:1)

    by Anonymous Coward

    Resident slashdot experts, tell me why this is bad and what you could have done differently for 1/100th the cost.

  • Will it be at least as good as RuPauly? (Score:5, Interesting)

    by 140Mandak262Jamuna ( 970587 ) on Friday March 17, 2023 @03:49PM (#63379061) Journal
    India thinks digital payment infrastructure is a public utility. It has a system based onQR codes to pay for goods and services seamlessly. Street vendors, even beggars use it. The payer does know details of payee other than a qr code. Payee does not know the payer. Neither pay transaction charges. Govt picks it up.

    Handles four times more transactions than uk USA France and Germany combined. Now it's going international with Singapore joining in.

  • Effect on Credit Card Companies (Score:3)

    by skam240 ( 789197 ) on Friday March 17, 2023 @04:14PM (#63379125)

    I wonder what this will do to credit card companies if this is successful enough. Currently they charge a ridiculous per transaction amount to retailers https://www.nerdwallet.com/art... [nerdwallet.com]. who mostly pay it because everyone expects to be able to pay with a card when being rung up. If enough people have access to digital transactions that dont cost retailers a penny to accept I wonder how long retailers will be willing to accept credit card companies trying to take a cut of every transaction.

    • Comment removed based on user account deletion

    • Re:Effect on Credit Card Companies (Score:5, Interesting)

      by Xylantiel ( 177496 ) on Friday March 17, 2023 @04:36PM (#63379183)
      Not sure how it would replace the credit part of credit cards. But it would be nice to separate the three aspects of credit cards: transaction, credit, and purchase insurance. Seems like the hardest part is what has always allowed credit cards to be entrenched: the purchasing insurance. (i.e. ability to dispute a charge) You transfer money via FedNow, it's gone. No such thing as a dispute. This is why there are big warnings up on things like venmo and zelle about not transferring money to someone you don't know.
      • Purchase insurance sounds like a USA problem to me. Other countries have consumer rights. Nowadays, you can sue a company quickly & cheaply online (usually for free) in a small claims court if they refuse to meet or delay meeting their obligations under the law. You don't even have to be in the same country.

    • Re: (Score:2)

      by kiick ( 102190 )

      I wonder what will happen to PayPal, zelle, Venmo, etc. Isn't this what they do?

      As for credit cards, I suspect more retailers will offer a "cash discount", like most places do for gasoline. After a while, the credit card companies will either lower their rates, or lobby congress to put limits on the fed system.

    • Re:Effect on Credit Card Companies (Score:5, Informative)

      by b0s0z0ku ( 752509 ) on Friday March 17, 2023 @06:45PM (#63379469)
      This isn't a replacement for credit cards (yet) - this is a replacement for ACH for bank-to-bank transfers. This isn't consumer-facing at this point.

  • What bothers me is that there is literally no published API to even look at and develop for. It should be in it's final stages of development where the API is stable and therefore able to be published but THERE IS NOTHING.

    • Re:And yet no API to see! (Score:4, Informative)

      by 140Mandak262Jamuna ( 970587 ) on Friday March 17, 2023 @05:10PM (#63379281) Journal
      Its going to be like the UPI developed by India. Probably it could even be Indian UPI system. Already Singapore is part of it. Such a short time, and not API or beta test. So it could simply be an extension of UPI. https://www.nytimes.com/2023/0... [nytimes.com]

      API is all between banks and clearing houses.

      The vendor has a QR code. The payer has an app in his/her phone that takes the QR code and asks for the amount. Enter and click send. Your app sends cash from your linked bank account to the vendor. It is push, not pull like credit/debut cards used in POS. Vendor would only get a transaction id, and cash. No details of the payer. Your app will only have the vendor code and transaction id, no bank details of the vendor.

      UPI is the back end. Customer facing end is handled through many competing apps. Google has GPay, and there are others from Indian companies.

      • Apparently it only works with Indian GPay accounts. Or at least when I was in India, I couldn't figure out how to do it with my US GPay account (that had a balance in it). There wasn't even an option in the app to scan a QR code.

        But it would be fantastic if the US moved to this system. Credit card companies charge absurd fees, and they have control over what people can sell. If they suddenly decide that they don't like the physical product that you're selling (has happened with companies I've been involved

        • India announced it will be extended to visitors too. On entry, in the airport you can get a prepaid wallet on your foreign smart phone. Soon.

    • FAQ found in https://explore.fednow.org/res... [fednow.org] says API will be added in a future release.

  • So E-Transfer? (Score:2, Informative)

    by thedarb ( 181754 )

    I mean, Canada has only had this for like... forever.

  • We did need a cheaper back-end payment system to move money cheaply, but we didn't need it to be government-controlled. Ethereum was building towards this goal, and still is. Ripple arguably already has a system developed . . . but last time I checked, it was fully-centralized and controlled by one party (Ripple Labs). At least a public blockchain option has the advantage of being decentralized. Then no despotic hands could "debank" you for being involved in some industry they happen to dislike that par

    • At least a public blockchain option has the advantage of being decentralized. Then no despotic hands could "debank" you for being involved in some industry they happen to dislike that particular day

      That is the true advantage of Bitcoin. No one can stop you from paying someone else.

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