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by centimeter 2185 days ago
> money transfers are going to be less complex, clunky and costly.

You really think the Brazilian central bank is going to make a smooth, efficient, and cheap money transfer service? What reason do you have to expect that to work?

6 comments

> You really think the Brazilian central bank is going to make a smooth, efficient, and cheap money transfer service

They will not do a transfer service, they will provide a specification that must be follow in order to provide instant payments and transfers.

To be honest, our central bank is pretty good in create such specifications.

As a Brazilian living in the US I can tell you that the TED system is already a smooth, efficient, and cheap money transfer service compared to the solutions here in the US.

So I have total confidence that they are capable of creating a better yet version of it.

As a Brazilian living in Canada, I can say the same.
As a Brazilian living in Brazil I'm surprised that anyone would expect a service provided by the Brazilian government to be efficient, or even work at all.

This Pix thing seems to cover more than inter-bank transfers, people are expected to use it for QR code-based mobile payments for instance.

The HIV treatment program, provided by the brazilian government for free to everyone that needs it, has been very succesful and is a model to be followed. Not everything the government does is rotten, just a lot of it.

"Throughout the 1990s, when the annual cost of drugs for AIDS treatment often exceeded US$10,000 per patient, the World Bank and other development agencies discouraged developing countries from implementing treatment programs, favoring “cost-effective” prevention over costly treatment. Brazil challenged this conventional wisdom and, despite World Bank objections, has provided free universal access to highly active antiretroviral therapy (HAART) for all people living with HIV/AIDS since 1996." source: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2782963/

You have a very narrow world-view. You can not even imagine...
What solutions have you tried in the US? Venmo and Cash App are both free and work up to like $2500, at which point you have to deal with government systems like ACH and it gets slow and expensive.
The US banking system is archaic compared to elegant systems like they have in Australia/New Zealand (and probably Europe). No malicious rent-seeking third parties needed in the transaction.
Perhaps you should do a little bit more research. Zelle allows payment between banks (almost) instantly. No fee, since it's a service owned by participating banks, practically all major banks in the US. Zelle processed $187 billion in 2019.

https://www.zellepay.com/get-started

Perhaps you should do a little research and find that the rest of the world has been doing that between all banks for a decade or two.

Not mention its ubiquity that allows everyone from teens to grandparents to pay .25 for a cookie, to dropping a down payment, to paying bills, to filing taxes, to automating a weekly rent check. Basically an elegant single system required for modern life.

The fact zelle, launched in 2017, has a brand name, and competes for mindshare illustrates how they missed the target. In other countries it’s called banking.

Pretty sure you are viewing it from an American perspective. India has had a government created smooth efficient money transfer service for >17 years now. There are multiple systems - all created by the government - and they work perfectly almost all of the time.
Just wondering (not criticising), why would the government create and run multiple systems doing the same?

Is this something to do with the differences between regional states in India?

Brazilians can already do inter-bank money transfers using their bank accounts apps cheaply.

Pix is an improvement over those systems (shorter processing times - as in seconds instead of minutes) and checks are almost nonexistent.

I wouldn't say cheaply... Unless you have a digital-only account or has a high-class account (like VanGogh,Personalitté, etc) it's cost almost 9 BRL for a inter-bank transfer.
9 BRL is what? 2 USD?

Compare with https://answers.usbank.com/answers/s/article/How-much-does-a... (spoiler alert: 10x more - for both senders and receivers)

Whatsapp transfers would be ~ 5% of the cost which would make it more expensive for anything over 200BRL

Meanwhile inside the SEPA Area (EU), National and International payments have the same cost (which is usually 0)

In the US I pay $0 for transfers under like $2500 using various free services like Venmo or Cash App.
Good to know

Do business accept Venmo (I know some do, though it seems Venmo is backed by a pre-paid card)? Can you pay your rent with it, for example? Tuition? Buy a car with it?

The payment methods I mentioned don't require people to install an app or enter an agreement, you have a bank account they're available to you. Sure, there's some typing of numbers (but that's pretty much a copy-paste today). Not to mention the privacy issues with Venmo.

Things like rent, tuition, and car payments are done in the US with ACH. Takes a day to clear (which is fine for scheduled things like that) but free.
You entered an agreement when you got a bank account in the first place...

These payment apps tend to work like another bank account in practice.

People use P2P apps when they want to casually send money to people they know. For merchants they get the square app and process credit cards directly. Venmo & friends tend not to be good for actual business for large transactions due to how bad chargebacks can be on it, so for large transactions you can use ACH which tends to be $0.25 for pretty much any money value, or free in many cases.

Has worked elsewhere. Here in the UK, money transfer is mind boggingly fast, and free.
EU "faster payments" system. We don't quite have the last mile of hooking it up to apps with QR codes, though. To add another to the list, see Norway's VIPPS.
Is this what replaced ACH in the EU? It baffles me that it still takes 2-3 business days to perform transfers in the US over ACH.
It is everywhere in Europe but there is a problem with IBAN transfers. It exposes a lot of details, like your name and your bank branch, to the receiver. And some sites accept IBAN numbers for small payments without any other kind of authentication.

It's an electronic version of the times when we used to mail transfer cards to do transfers, but this day and age needs a lot more privacy protection. Same with other old tech like the phonebook. Who gets themselves listed anymore? It leaves you open to way much spam and scammy crap calls.

Well, they've done pretty well in the past. I'd worry more about random ATM outages from Banco do Brasil than the standard being bad.

Brazil is pretty far ahead of the USA when it comes to money transfers, though I grant that this is a pretty low bar.