Most debit cards cost the merchant 0.05% for interchange and provide consumers with fraud protection.

I suspect fednow is why visa and MC are moving now to reduce fees.

I can’t wait.

It almost certainly isn't. Nobody's taking FedNow at point of sale.

Nobody is doing anything with FedNow yet because it's not out. But if it works it will grow, just like in the EU where they have similar things and they're used.

When I said "nobody is taking FedNow" I meant nobody is going to be taking FedNow at the point of sale after launch in July. It'll work just fine, but it enables things like Cash App, Zelle and Venmo to avoid using debit rails. It's quite unlikely it'll actually exist at cash registers. Out of curiosity which product are you referring to in the EU? To my knowledge they just use Visa/MC Debit or local debit schemes at point of sale.

Lots of larger purchases use the equivalent of what would be in the USA a routing number and a bank account number.

At which retail point of sale?

I suspect it’s fast cryptocurrency networks. There’s L1s where you can pay on your phone and the transaction goes through in a second and a whole bunch of payment startups.

With 3d secure and SMS verification I would argue that any standard crypto payment is faster than credit card as has been for a while. At least online.

That sounds great. We all know how secure credit cards are and that nobody ever gets fraudulent charges.

In China most payments cannot be reversed. By contrast, the security of payment methods are much more stringent in China.

I was surprised when I first learnt that you could spend money online with a VISA card by only card number, expiration date and a 3(!) digit CVV. Those are hardly secure and printed out on the card that anyone can see. Then the US merchants have so many rules about fraud detection but all of them are just heuristics with many false positives and false negatives.

When Internet companies constantly invents new methods to both increase security and usability (two step authentication, pass keys, FIDO-U2F), the payment industry in the US is just stuck in the past.

Many of the large American companies involved in payments (Visa, MasterCard, Stripe, Square, PayPal) also operate in Europe, and implement the modern security practices required here. 2FA for credit/debit payments made online, for example, and chip payments since... 2004 or something.

American payment systems are shockingly outdated and have been so for decades.

Just because things are different doesn’t mean they’re “outdated”.

The optimal amount of fraud is not zero. Merchants, and consumers, both benefit from the equilibrium where there is much more commerce, backstopped by bank fraud detection.

Credit card fraud is just not a large problem in the US, and the extra commerce encouraged by continuing to use a relatively insecure system generally outweighs the benefits of tightening security.

Tokenized NFC payments are even more convenient than swiping credit cards, and they’re gradually replacing the old system, but there is no urgency here.

Stripe and Paypal are annoying. They refuse payments with virtual debit cards, debit cards issued in other jurisdiction than your shipping (or IP?) address, etc. I'm usually put off when I see a Stripe or Paypal checkout screen.

The entire US financial system is built around debits, delayed settlement, and reversible transactions (as contrasted with bearer tokens). If a digital payment method doesn't support chargebacks/reversals, then it's not going to be used by consumers in its raw form. Rather it will have conventions layered on top of it that do support these things - like your bank contacting the receiving bank and saying "this transaction was unauthorized, please send money back". The alternative would be the possibility of logging into your bank account, finding that your accounts had been zeroed out, and having your bank say "too bad, there's nothing we can do". This would be plainly against Regulation E.