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by Brystephor 1433 days ago
I work in payments. Can you help me understand how fednow is a threat to credit card transactions? Who even benefits from credit card transactions outside of the credit card user and the network? So what is actually being threatened?
1 comments
toomuchtodo 1433 days ago
I work adjacent to payments in fintech. I’ve had conversations with largish merchants who have mentioned their intent to attempt to move payment flow to these new rails when available to reduce CC processing costs. Will they? I cannot say for sure, I speak the lens I see through. A real recent quote from a CFO: “why am I handing over 2% of my revenue just to take a payment if I can avoid it?”
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Brystephor 1433 days ago
I just did a very quick read-through of fednow. It'd be awesome for businesses if they could get their customers to pay via fednow over CC. Just the data requirements alone are less costly (e.g. no PCI DSS requirements for bank accounts).

The problem I think of is getting the customers to use this. If you can entice your customers to consistently use this rail, that's awesome. No idea how you'd do it other than increasing costs to pay via CC. It seems like it also targets digital payments and isn't too focused on in person transactions (e.g. grocery stores).

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noway421 1433 days ago
FedNow will allow instant bank transfers. That means that you can build a payment system on top of it similar to Windcave Account2Account (that we have here in Australia and New Zealand)

Windcave Account2Account is not a full replacement for debit/credit cards. It does not have PayWave (solvable). It has a clunky UX (solvable). It does not do credit transactions (not solvable).

It can be a minor headwind to VISA/Mastercard and slightly reduce their new signups and tx volume, but I cannot see it fully replacing credit/debit cards.

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mellavora 1433 days ago
Wonder how FedNow's instant bank transfers will impact crypto; isn't "instant transfer" one of the advantages of i.e. bitcoin?

> FedNow payments will operate year-round for businesses and individuals. Since funds will transfer and settle instantly, all payments are final and cannot be reversed.

https://www.moderntreasury.com/learn/what-is-fednow

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