alt Hacker NewsFor purchases, the US has debit cards and Zelle. Banks instantly exchange non-revocable promises to pay and the money follows at the end of the day. This is more capital (cash) efficient because it allows netting. One key here is that everybody in the US banking system is under the same regulators (Federal Reserve, FDIC/NCUA) so there's greater trust that they won't go under before the cash comes.
A very important point is that debit cards offer consumer protections (chargebacks for unsatisfactory goods). FedNow, Zelle, wires, ACH do not and people have lost money by scams this way.
If you don't need it right that second, same-day ACH is widely used, and again the delay allows more efficient netting.
The Clearing House's CHIPS is a good in-between, it's not guaranteed instant, but uses an algorithm to match transactions as fast as possible with constrained float.
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I want to send money between accounts I own in real time. I want to deposit money in brokerage accounts in real time. I want to stop connecting my accounts to services like Wise to make money transfers. I want to pay off a credit card and have that payment clear instantly. FedNow could enable all of this.
Purchases are an afterthought. A system like Brazil's Pix could be rolled out on top of FedNow.
Is this correct - A very important point is that debit cards offer consumer protections (chargebacks for unsatisfactory goods) - I was under the impression that only credit cards offer chargeback protection?
The Clearing House owns both ACH (automated clearing house)and RTP (real-time payments).
https://www.theclearinghouse.org/payment-systems/rtp
Zelle is pseudo real time. The settlement (mostly/often?) happens by ACH.
Instant for USA banks doesn’t mean instant for USA banking customers, and deposits can be held per fed and banking policies for variety of reasons especially larger deposits. Also, it’s increasingly common to have financial routing intermediaries playing by different rules and non-insured financial accounts that result in no coverage when the money is spent/lost elsewhere and not returned to end customers. Take a look at Zelle case in New York and the nearly $100M customer funds missing with the Synapse bankruptcy.
My point is that these properly designed national systems should also be considered in the USA as well, and not dismissed because something is kind of working right now with a long list of exceptions to a good and safe experience.