Hacker News Reader

Comment by spinax | Hacker News Reader

Thanks for sharing, I as well didn't know about this. I've enrolled/used Zelle (via my bank app) and it's just a travesty of usability to me, after awhile I ditched it (and I don't hear a lot in the news about Zelle these days).

What's your hot take on this new FedNow system vs. what Zelle tries to achieve via ACH? Do you think it'll be more "Venmo-like" (low friction) or will it end up a usability mess due to regulation requirements?

View on HN

Zelle is owned by a consortium of the largest US banks [1], and does much more volume than Venmo (because its built into the UX of those participating in Zelle's real time payment network [2]). Congress strongly encouraged the Fed to develop FedNow to prevent Zelle from keeping smaller banks out of instant payment infra. FedNow will eventually replace the ACH system.

Hot take: banks being banks, they'll crowd out fintechs because fintechs aren't chartered banks regardless of the UX (which is why Bancorp Bank is the underlying for so many fintechs).

[1] https://techcrunch.com/2017/06/12/zelle-the-real-time-venmo-...

[2] https://www.zellepay.com/get-started

> FedNow will eventually replace the ACH system

Now that's interesting - does that imply that the clearing delays in transfer (say your US Bank to your Brokerage, ~3 days ACH) will disappear and FedNow makes that an "instant" (within 1 day let's say) settled transfer? Very intriguing.

Yep - the goal is to move to ~real time transactions so settlement is instantaneous for most transactions with a much shorter window for settlement for those txs over some threshold (initial working docs said $25k, but it'll likely be larger by the time it rolls out).

Reply on news.ycombinator.com