> It amazes me how seemingly behind US banking is tech-wise.

This is a statement true in other infrastructure domains, from plumbing to roads to healthcare. It was explained to me that although the US possesses world-class technology in practically every field, the deployment is mediated through a fragmented and diverse political economy.

That’s when I properly internalised how the US is federated not merely at the top level, but through many strata of localised governance, and the practical consequences thereof.

Couple this to the inertia of regulatory capture by entrenched wealth (which occurs in all human systems irrespective of political construct) and it’s easy to accept that US retail banking, which is approaching three centuries of uptime, will be a very late adopter of mass-market technology.

This sounds reasonable, but I'm not sure it's all the explanation.

The EU is far more fragmented at a government level, but chip&pin cards where much more common than in the US far earlier.

Likewise, mobile communication was far better in Europe 20 years ago than it was in the US (all of Europe had GSM while the US was insanely fragmented).

And the EU was able to push the open banking directive with relative ease while the US still seems to have nothing comparable.

So it seems to me there's something else in play that explains your observation.

> So it seems to me there's something else in play that explains your observation.

There is, and with apologies for the late reply, I'll unpack one term I used, which is diversity. I've lived and worked all over the EU and feel comfortable observing that practically all EU national, regional, and local governments are politically clustered within one deviation of the International Standard Social Democracy. What's more, they actively work together at the top level to promote harmonisation of processes and industrial/commercial/technical/legal/administrative standards.

I'll contrast this with the US where the political window is splattered all over the compass, process & technical standards are driven by corporations that actively seek to differentiate themselves from one another, and regional and local political groupings will take a deliberately contrarian tack on a diverse policy spectrum in order to more clearly disambiguate themselves from opposing forces and to segment and cement their constituencies.

I believe the latter drives more innovation through competition, but distributes it more unevenly. And I'm neither a US citizen or (currently) resident, just a frequent visitor both for work and play, but I also think that the greatest single quality of the US is being the only country where practically anyone, regardless of cultural backdrop or however divergent their social/political preferences, might hope to find a community of like-minded individuals. What that isn't: a recipe for harmony.

The reason for that is because the US was "standardizing" finance before the EU even existed, and therefore has momentum from those standards that needs to be overcome in order to adopt new standards.

e.g. having strong anti-fraud/anti-theft practices built around signatures.

European countries were also standardizing finance before the EU existed, but that meant that there already was the infrastructure of banks working together (in each country) that was then used to establish the EU wide protocols.

In comparison US banking seems rather adversarial in nature and so there are few interbanking standards which led to the need of a layer on top in the form of credit card companies to abstract away the differences.

> the deployment is mediated through a fragmented and diverse political economy.

Not to mention that bizarre toxic mindset of "I'm losing money (taxes) if someone else is getting comfortable."

Underrated comment. You have managed to eloquently and elegantly summarize why the US is slow in adopting new standards - be it banking or the CMDA/TDMA mess.

I think US (and other western countries like Canada, European countries etc) are VERY different from the Indian market. In US, Canada etc, everyone has an email and banks allow interactive payments already. I have yet to have a single time where I had problems paying someone for something. Interac etransfer works well. Even iMessage, FB messenger etc allow payments. Other services like PayPal, Stripe, Patreon cover the rest of the base.

India is a completely different market. There are millions of people there who don't even have a bank account, nor do they have email. The road-side vendors use cash.

The other thing that amazes me is how quickly people will jump to defend the US' hodge-podge of third-party walled garden options. I've been able to send near-instant account-to-account transfers for a decade, for a stamp charge capped at the equivalent of about thirteen cents, via a first-party platform that every bank or bank-like institution is required to be part of. So yeah, "options" like "join Facebook" or "wait a couple business days for your transaction to be complete" or "pay (comparatively) exorbitant fees" will always sound inherently ridiculous to me.

To my knowledge the situation in the US is getting better with the rise of Zelle, but that's still a half-assed solution - not all institutions participate, and customers have to opt in to it. Quite a few (older) people I've talked to don't even know it exists.

> India is a completely different market.

Ironically you are quite close to getting the point here, which is that India (and many other developing nations) are able to build and push the cutting edge of national fintech precisely because they don't have decades if not centuries of cruft and technical debt weighing them down. They can skip the inefficient stages of development that developed nations went through and go straight to creating banking systems for the 21st century.

FWIW, the few times someone tried to send me money via Zelle, it’s been a mess.

Wherever email they sent was caught in GMail’s filters, so I never saw it. And you have to click a link to accept the payment, even from an established contact who’s sent funds previously. And after a bit the funds get returned. Too easy to lose money.

Instead, I just ask friends to use Square Cash. Auto-deposits into my bank account so there’s nothing to worry about.

Also, higher value payments are still easiest via check - since the online payment services will threaten to suspend your account if they think you’re running a business. Splitting rent amongst roommates was enough to get one of my accounts flagged as a business.

I've been using Zelle for 5+ years and I've never had to click any email. Other than initially logging into your bank account and setting up which email/phone number you want to use, I haven't had to do anything.

All I do is tell people to send money to my phone/email, and it shows up pretty quickly.

distributed pay mechanisms are a good thing in my mind. I don't know why everyone thinks it's a great idea to have corporations, the government, and banks knowing everything about your buying habits and consumer persona.

Having a patchwork of 20 payment acvounts is a mess and a security risk. Besides i trust my bank much more than i trust google / facebook / etc.

If i really want to spread my payments for privacy, i can open 10 banks accounts in 10 different banks.

UPI doesn't work without a bank account. Additionally, its launch was preceded by the Jan Dhan Yojana [0] which pushed hundreds of millions of the poor to open bank accounts. Today most street vendors in India - including even pushcart vendors - will accept payment via UPI. It has become even more popular in the past couple of months because of Covid-19 and hygiene concerns with handling cash.

0. https://en.wikipedia.org/wiki/Pradhan_Mantri_Jan_Dhan_Yojana

Edit: added link

I think other countries (particularly Europeans) like to think we're primitive and still paying with pieces of 8 and bartering with furs and hides.

This describes it https://en.wikipedia.org/wiki/Leapfrogging#Leapfrogging_in_d...

In fact, I've often thought it would be an interesting experiment for a developed nation to form a partnership with a developing one - equal, of course - to experiment with what modern infrastructure might look like without having to cater to legacy systems.

A unique challenge for US dollars is that as the defult choice of all kinds of dirty money, it has a huge laundering problem. This is not the case for Chinese Yuan and, I presume, Indian Rupee.

In China the gov doesn't care about any amounts of transation or cash, you can walk in banks and deposit millions of dollars of cash and will be treated as VIPs, "all-cash-bill" buying of condos is normal. I think it kind of has something to with corruption, since you don't know who is behind this money and what trouble will get you if you dig too deep.

Also the protection others mentioned, once the money got to other accounts, which usually happens instantly, it's almost impossible to get it back.

Google for Hawala.

This is not true in India. Every transactions bigger than 50,000 needs pan card. RBI monitors all big transactions. You can't deposit any big amount in bank without mentioning proper sources else Income tax dept enquires you. The Indian way of doing corruption is Hawala (gold mostly). As Modi govt did demonetization, all old currency became obsolete, wiping huge black money.Now nobody wants to launder money in cash. Govt also tried to bring adhar card system similar to US security number, so everything can be tracked but it was opposed by court.

It's going to be a looooonnnng time before Americans voluntarily turn over all their buying power to a government controlled payment system that takes away all consumer privacy. I still pay with cash myself when I can.

I don't think the poor in India are worried about Govt knowing about their 5-10 rupee purchases. Vast majority would be worried about where their next meal/income would come. Privacy would be for the rich to worry about their income getting reduced by Govt taxes.

Thank you for sharing this. Very impressed with this transparency by the switch operator. I couldn't tell how reliable this switch operator itself is. Is there statistics reported from the perspective of the payment initiator? (consumer-side app/service provider)

The US isn't behind 99% of the places I go will accept a phone payment. I still choose cash as I don't like everything I do being tracked and documented forever.