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Comment by toomuchtodo | Hacker News Reader

I’m at a FinTech and some of the merchants we’re in the same orbit with are actively moving to replace credit and debit card payments with FedNow instant payments. One is paying almost $6M/year in debit and CC interchange fees, so they are highly incentivized.

Personally, moving money between Wise and Chase bank instantly was magic the first time it happened. Finally felt like I lived in a developed country.

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> I’m at a FinTech and some of the merchants we’re in the same orbit with are actively moving to replace credit [...] card payments with FedNow instant payments.

What is the benefit to the consumer of using FedNow instead of a credit card when paying for a purchase? Is the merchant planning to add a credit card surcharge, thus the sole "consumer benefit" is avoiding this surcharge?

Why would you assume there has to be consumer benefit for this change to be made? Everyone is paying ~3-5% more throughout the economy for interchange fees, some of that will remain as savings or profits in enterprises, some of that will be returned to consumers through lower prices as businesses switch payment rails.

Some people will have to pay more to keep using credit cards (whether for float, purchase insurance, or convenience), simple as that.

perhaps long forgotten, but PC parts sellers (ones who'd buy lots and then break bulk to consumers) used to charge 3% more than advertised price for CC transactions. iirc that was often the entirety, or more, of their margin.

I have wondered if FedNow is going to hurt the credit card industry. At least I hope it brings some competition.

Unlikely IMO. According to my limited research, FedNow competes with ACH and other direct payment systems (e.g. Zelle), while credit cards are loan-based.

> credit cards are loan-based.

should be

credit cards are points-based. Many / most credit holders don't care about revolving credit, but they do care about rewards points. This may be US-only.

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