Hacker News Reader

Comment by lawn | Hacker News Reader

You cannot compare the speed of the different services without bringing up settlement time, how long it takes for money to become irreversible.

Yes you can send money very quickly with SEPA, but that's not the settlement time. The money can still be reversed (although with more difficulty than credit card payments). With Bitcoin you also get a notification in seconds, but the payment becomes extremely more difficult to reverse in around 10 minutes.

So they're either equally fast or Bitcoin is faster.

View on HN

> Yes you can send money very quickly with SEPA, but that's not the settlement time. The money can still be reversed

From a banking perspective, the money is settled in 10 seconds, at least with TIPS (the ECB’s platform; the ACH clear it, but the end-user behavior is the same).

Reversal (known as a recall in the standards) requires consent of the beneficiary.

Thanks, it seems you're right.

Recalls don't require consent of the beneficiary.

> It will depend on the consent of the Beneficiary whether to turn back the Funds to the Originator.

SCT Inst Scheme Rulebook § 4.3.2.3 [0].

Of course, if you are talking about fraud, yes: banks may answer positively to a recall, without contacting the beneficiary, when the beneficiary is a fraudster. Indeed, local laws often require that of banks, and therefore the standards define a dedicated protocol for that.

When you break the law, many legal protections no longer apply.

[0]: https://www.europeanpaymentscouncil.eu/sites/default/files/k...

There are many cases where asking the beneficiary is not necessary, fraud is only one of them.

And to clarify, it's not really "fraud", it's "claim by the originator that a fraud occurred". Which is a very different thing, and which matters immensely in practice.

There are three cases. Fraud is one, the two others are banking mistakes. First, when the bank sends the funds twice by accident. Second, when the bank was not meant to send the funds.

In both of those cases, the beneficiary bank is not even required to send the funds back. It can require consent from the beneficiary (which is its client, after all) if it wants.

Yet in both cases, the beneficiary is not even meant to receive the funds.

Fraud works the same way: unless local law requires it, the beneficiary bank is not required to send the funds back, and can rely on beneficiary consent.

most people most of the time care more about the time it takes to get the initial confirmation, not the actual settlement. most consumer transactions are not large enough for reversibility to matter that much.

Exactly. Which will take a few seconds with Bitcoin.

Reply on news.ycombinator.com