[happymellon]

I don't understand quite how slow the American banking system is.

In the UK we have had immediate money transfers between institutions for a long time now. Why hasn't the US ACH system provided a near real-time transfer service, and the rules put in place to adopt it?

There is Zelles, but from what I understand, not everyone has adopted it plus it's a 3rd party so it would reduce visibility of dirty money transfers for the Fed.

[daxcurzon]

This is indeed mind boggling from a European perspective. Visa/Mastercard and banks just taking 1.5% of everyone's money because fast and free bank transfers for reasonable amounts don't exist.

People in the US pay all their bills with physical checks and debit cards, which is even more absurd considering that the US banks and credit card companies, last time I checked, still don't require proper 2-factor authentication for online payments or require PIN for in-person payments. Any time I make payments online in Europe, I have to use 2-factor auth and an e-PIN; it adds a whopping 5 seconds to the payment process.

Only large transfers in my country have a fee. I bought a flat a few years ago and sending a 6-figure sum (USD equivalent) to the escrow account only cost me $15 in transfer fees and it arrived a few hours later, though a person from the bank did call to confirm as a security precaution.

[blamazon]

> Visa/Mastercard and banks just taking 1.5% of everyone's money

It should be noted that in the EU, interchange fees are limited, by law[1] to 0.2% for debit cards and 0.3% for credit cards.

It was an interesting consequence of Brexit that (certain) interchange fees shot right up to 1.5% in the UK. [2]

[1]: https://cms.law/en/bgr/publication/eu-cap-on-interchange-fee...

[2]: https://www.reuters.com/world/uk/uk-payments-watchdog-review...

[fransje26]

Because.. ..money?

They can get away with being slow, and with overcharging for a transfer, so why not? The system they use can probably do an instant transfer at close-to-zero cost, but their "cartel" position means that they have no incentive to improve the current system. And if a "threat" comes from an exterior actor, they can a) use their influence to regulate it out, or b) lower their fees/accelerate the transfer process while "showing" how reactive they are..

[happymellon]

Same day ACH appears to be a thing though.

https://www.nacha.org/rules/same-day-ach-moving-payments-fas...

So doing it but through another 3rd party doesn't make much sense. When the same system could be immediate or the destination takes a day or two, it's all a bit mad.

Does the US not have the same levels of competition that you see elsewhere? Surely a financial institution that can offer immediate money movement, or even overnight, would drive people to use that bank.

We have startup banks, like Starling, Monzo, Revolut who come up with some really neat ideas to differentiate.

[refurb]

I have no idea what the process is, but i helped a friend convert USD through Wise and send to another country and it was instant from their Chase account to the foreign account, even though they selected “pay by ACH”.

And i also noticed BOA will show ACH transfers in 24 hours when it used to be 2-3 days minimum.

Clearly theyve improved the process.

[fragmede]

Most banks I've run into have adopted Zelle. The problem with Zelle are that the UX is shit, and there are strict limits on how much you can transfer, which severely hampers its usefulness.