Why it's taking so long for Americans to get payments instantly

Re:Why it's taking so long for Americans to get payments ins... by SideburnsOfDoom on Sunday December 17, 2023 @02:02AM (#38670953)

The many small banks will buy most of the IT backend "as a service". There are a small number of vendors for this, FiServ comes to mind (1). And that industry is very concentrated - the number of competitors to FiServ for actually running a bank will be in single digits.

1) https://en.wikipedia.org/wiki/Fiserv

https://www.fiserv.com/

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Re:Why it's taking so long for Americans to get payments ins... by bob1029 on Sunday December 17, 2023 @05:52AM (#38671976)

See also: Jack Henry and associates. We are working with both of these vendors into 2024.

It really is incredible to me the moats that some of these business leaders have been able to construct. At the end of the day, what these companies are selling is regulatory permission to use a very over priced SQL database.

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Re:Why it's taking so long for Americans to get payments ins... by lxgr on Sunday December 17, 2023 @02:26PM (#38675583)

Offering a new payment service with different semantics to all existing ones is not only a tech/backend change, though.

The real-time aspect of FedNow has liquidity implications; the fact that it (optionally?) allows outbound push payments for consumers at a much cheaper rate than wires makes means that automated fraud prevention becomes a priority.

In other words, when you can charge $10-30 for an outgoing (and often incoming!) wire, that pays for the liquidity and manual fraud reviews (during business hours only). At roughly $0, those economics change significantly.

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