Hacker News Reader

Comment by bawolff | Hacker News Reader

I guess i dont really understand what this means for the average consumer. Isn't interac etransfer essentially instant?

It's not instant and it relies on a private company for settlement. Even though customers typically get this for "free", the institutions themselves are paying interac for these (so the account-holders are paying for this one way or another)

From what I can tell, e-transfers will continue using interac's network, so I'm not sure if this will benefit users at all. Depends if banks integrate a new user-facing money transfer option. I suspect it'll take years if not decades for banking institutions to roll this out to users, though they may use this behind the scenes for inter-institutional transfers without Interac.

Someone who's more knowledgeable about Canadian banking and payment processing, feel free to jump in here because I'd like to know more as well.

You're correct on the first point, and it's worth adding that Interac is a closed network - Interac has no obligation to let anyone participate, and it's been a pain point in the FinTech world that you either have to convince them to let you in (e.g. Wealthsimple) or piggyback on a banking partner (e.g. most other FinTechs.) Maintaining that banking relationship is a big burden for fintechs, especially if you rise to a level where a bank views you as direct competition.

RTR's membership requirements are set by PayCan, who have a mandate to foster competition. Any FinTech who can meet requirements can, in theory, hold a settlement account on RTR and participate. Interac has an incentive to keep the club small, so to speak, and prevent new up-and-comers from cannibalizing their market share.

From a competition lens, the hope here is that RTR levels the playing field for both the big banks and fintechs and opens the door to a lot more consumer-facing innovation. That will, of course, depend on the network effect and who gets onboard.

> From what I can tell, e-transfers will continue using interac's network, so I'm not sure if this will benefit users at all.

quote from the page:

As Interac e-Transfer payments begin to clear and settle on the RTR, we will put this world-class infrastructure to work for consumers and businesses.” Jeremy Wilmot, President and CEO Interac Corp.

Interactive etransfers are far from instant. My last company supported etransfer payments. On a good day they would take ~10s to process, 30s was decent, and single digit minutes were normal. Legitimate payments that got flagged by Interac's fraud detection rules were often subject to delays measured in hours, sometimes days.

Good enough for consumer to consumer use and some online use cases, but definitely not good enough for retail.

Many retail locations (such as grocery stores) still accept cheques. What's the turnaround on those? Seems seconds for normal transactions, and days for worst-case scenario isn't so bad, or at least I thought

that's a false equivalence. no business is choosing to adopt personal cheques and the number of places that still accept them drops every years. beside the clearing time isn't really the issue. credit and debit card payments typically take a business day to clear, which isn't that different from cheques. the main appeal to credit/debit, outside if the UX, is that they have built-in NSF checks and visa/mc takes on a lot of the risk involved.

but let's compare cheques anyway. consider what it takes to send an etransfer to a new recipient. you open your phone, then your banking app, then you enter a phone number or email address and set a password for it, then you can initiate a payment, type in the amount, double check it, hit send. THEN the seconds/minutes delay kicks in.

if you already have the business saved in your address book then it might be comparable with writing out a cheque, but I'd be willing to bet in the average case, etransfer is going to be a slower and more error prone.

Thanks for the explanation :) every time I learn something new about how money works, I learn that I know next to nothing about how money works. And I hadn't thought about the UX perspective re: cheques vs e-transfer lol the only business I send e-transfers to is my local cab company, and now that you mention it that can be a bit of a pain in the ass...

When I sell things on local used sites I started only accepting cash because e-transfer is so slow and led to situations of someone standing in my entryway while we wait to confirm the money went through.

Or giving up and saying "alright, I guess I'll trust you and hope the money comes soon"

Reply on news.ycombinator.com