Would a nationwide, Fed-run instant payments system be successful in the US? Would you use it?

17 comments

1. Zelle already kind of exists for that purpose, although it would be nice to have something easier to use

2. I see no real advantage to that over the options I already have available.

3. Could it be successfully implemented?

   Yes. It could.

   But what is possible is not probable.

4. Venmo, Zelle, cashapp already exist

5. It *could* be implemented, but I’d seriously question *why* it was being implemented and how practical the final product would be.

   And no, I’d stick with Zelle and CashApp.

6. As someone who used to work for a bank, it would be much better for citizens than what we have now. Hell, with all the fraud that’s going on the banks may like it as well. Companies like Venmo, Cashapp, etc. may hate the idea though.

7. Umm they are actually trying to do this: https://www.frbservices.org/financial-services/fednow/about.html

   And I can’t wait for US banking to finally do this at the bank level instead of a hodge-podge of incompatible apps and middlemen.

8. Reasons why not:

   1) The government is bad at doing things.

   2) It’s none of their fucking business who I might be exchanging money with.

9. We have Venmo, Zelle, Cashapp, and several others lol.

   We try to keep the governments grubby paws off our lives as much as possible.

10. I wouldn’t trust the US government to do anything with my money. It’s bad enough that they automatically withdraw it from my paycheck for taxes.

11. You don’t even need a government-run service. You just need banks that care about customers, instead of [shafting](https://en.wikipedia.org/wiki/Wells_Fargo_cross-selling_scandal) [them](https://www.consumerfinance.gov/about-us/newsroom/federal-regulators-fine-bank-of-america-225-million-over-botched-disbursement-of-state-unemployment-benefits-at-height-of-pandemic/) [whenever](https://www.consumerfinance.gov/about-us/newsroom/cfpb-fines-us-bank-37-5-million-for-illegally-exploiting-personal-data-to-open-sham-accounts-for-unsuspecting-customers/) [they](https://www.consumerfinance.gov/about-us/newsroom/cfpb-orders-bank-of-america-to-pay-10-million-penalty-for-illegal-garnishments/) can, and a regulator that keeps them honest. The USA has very weak banking regulation and banks that persistently act against their customers’ interests.

    The UK has a Faster Payments system for bank payments which are usually nearly instant and nearly all happen within 2 hours. It’s run by an [independent service organisation](https://www.wearepay.uk/who-we-are/).

12. We already have numerous options here. If our government were to try, it would undoubtedly be worse and they’d use it against us.

13. The US already has multiple instant payment systems:

    * The Fed already runs FedWire, which does real-time bank transfers 22 hours a day, 5 days a week. Banks usually charge significant fees for this, so it is mainly used for business-to-business transactions or home purchases.
    * Zelle does 24/7/365 instant person-to-person transfers between bank accounts with no fee. All the largest banks participate, as do many smaller financial institutions, and it can also use debit cards from non-participating institutions. Accounts enrolled directly (rather than via debit cards) can also send payments to businesses.
    * Venmo, CashApp, and Paypal do 24/7/365 instant person-to-person transfers with no fee, but only into the app account. There are fees for instant withdrawal to a bank account, or for businesses to receive funds. These work through debit cards so almost all banks can be used with them.
    * RTP does 24/7 instant transfers between bank accounts at participating institutions. All the largest banks are involved, but it is not yet widely used and consumer accounts might not be able to send RTP transfers at all.

    The Fed is in fact working on a new system called FedNow to provide 24/7/365 instant transfers between bank accounts with lower costs than FedWire, which should go live this year. It would probably take a long time for it to be integrated well with all of our thousands of banks, and users might still prefer the other systems.

14. That’s nice, seems like Indias BHIM/UPI system.

    The private sector has made some strides here like PayPal/Venmo, EWS Zelle, Square Cashapp, and even Apple Pay, google pay among others

15. What a great way to screw gig economy workers!

16. Probably not because for some reason a large portion of this country is rabidly against anything the Fed does.

17. You can do the same exact thing with crypto but you don’t need a bank account, social security number, ID or anything. Why would you need the Fed to do that when you can already do it with crypto and the barrier to entry is a lot less?