Federal Reserve launches FedNow instant payment service that could bypass Venmo and PayPal

[BumRushDaShow]

Source: NBC News

The U.S. Federal Reserve has launched a long-awaited service which will aim to modernize the country’s payment system by eventually allowing everyday Americans to send and receive funds in seconds, 24 hours a day, seven days a week, the central bank announced on Thursday.

The “FedNow” service, which has been in the works since 2019, will seek to eliminate the several-day lag it commonly takes cash transfers to settle, bringing the U.S. in line with countries including the United Kingdom, India, Brazil, as well as the European Union, where similar services have existed for years.

FedNow is launching with 41 banks and 15 service providers certified to use the service, including community banks and large lenders like JPMorgan Chase, Bank of New York Mellon, and US Bancorp, but the Fed plans to onboard more banks and credit unions this year. The Fed said on Thursday in a statement that 35 banks and credit unions were currently utilizing the service, as well as the Treasury Department’s Bureau of Fiscal Service.

The service will compete with private sector real-time payments systems, including The Clearing House’s RTP network, and was initially opposed by big banks who said it was redundant. But many have since agreed to participate on the basis FedNow will allow them to expand the services they can offer clients.

Read more: https://www.nbcnews.com/business/consumer/federal-reserve-launches-fednow-instant-payment-service-bypass-venmo-p-rcna95380

[brooklynite]

1. Participating banks

1st Source Bank
Adyen
Avidia Bank
BNY Mellon
Bridge Community Bank
Bryant Bank
Community Bank of the Bay
Consumers Cooperative Credit Union
Corporate America Credit Union
Eastern Corporate Federal Credit Union
First Internet Bank of Indiana
Global Innovations Bank
HawaiiUSA Federal Credit Union
INB
JPMorgan Chase
Mediapolis Savings Bank
North American Banking Company
Peoples Bank
Pima Federal Credit Union
Salem Five Bank
Star One Credit Union
United Bankers' Bank
U.S. Bank
U.S. Department of the Treasury's Bureau of the Fiscal Service
Veridian Credit Union
Wells Fargo Bank, N.A.

[roamer65]

38. JP Morgan Chase.

The 13th Federal Reserve district.

[bucolic_frolic]

2. They will have instant knowledge of every nickel you spend or move

Money and power are strangling freedom at every turn

"Mr. Frolic is a political operative on DU. He spent $58 on cocktails at a bar in SOHO last Sat evening. Find out who he was with."

[brooklynite]

3. I'm sure someone would be happy to receive some Bitcoin from you...

[Major Nikon]

5. Personally I'd rather trust the fed in that regard

At least they aren't going to sell my information to shitstains desperately trying to rip me off at every juncture. Right now everyone's financial information is readily available to anyone who wants to pay for it, and short of keeping your cash buried in a mason jar out in the back yard, there's just no way to avoid it.

[sybylla]

10. +1

[Effete Snob]

15. THIS THIS THIS THIS

I have Constitutional protections against government power.

I have no protections against corporate power.

[Johnny2X2X]

7. The banks already have that

The Fed isn't even really the government, they're just going to provide a more secure way to make payments. Paypal and Venmo are rife with scams.

[sybylla]

11. +1

[AllyCat]

22. Yes, this

[Marthe48]

23. Speaking of PayPal

wonder if this move by the Fed will encourage PayPal to credit my bank transfers to the PayPal account faster. Right now it takes 0 days for PayPal to take it out of my bank and 5+ days to have it show up in my PayPal balance. I imagine PayPal makes a lot of money on interest between the cup and the lip

[Dorn]

8. ...and they have the ability to control with whom you can and can't exchange money

[unblock]

9. Avoid banks at all costs!

[zipplewrath]

12. As opposed to your bank?

Use a debit card much? How about a credit card? They already know the vast majority of your spending habits.

[sybylla]

13. Tell me you don't know how private banks and credit companies work without telling me

you don't know how private banks and credit companies work.

But let a government agency create a way to do the same thing while preventing scam accounts and we all of a sudden need to be suspicious and protect our secret shit.

Yikes.

[bucolic_frolic]

14. Yikes

Willing acceptance of the blending of private banking and government power. This move puts the private information more easily within reach of political investigators. It's an open door for a parallel Deep State open to whoever wants to know, use, leverage, capitalize on it. Recall Sen. Gary Hart's downfall? Patterns of spending reveal where, who, what, when. Any seasoned investigator could leverage this apparatus, even journalists of various political stripes.

To ignore it does not make it invisible. It makes it more dangerous.

[KPN]

16. You are theoretically correct. But this stuff goes on already with or without FedNow. I'm

quite sure the fascist elements behind MAGAverse already have and have used this kind of leverage widely to ensure lockstep support.

[bucolic_frolic]

18. Thank you.

And this greases the wheels.

Just look at Grassley's unverified report today:

https://www.democraticunderground.com/1017847312

Not saying it came from financial information, but the principle is kind of analogous.

[muriel_volestrangler]

37. In what way is the principle "kind of analogous"?

this is the first time the full document — which contains raw, unverified information — is being made public. Called an FD-1023 form, it involves claims a confidential informant made in 2020 about Hunter Biden’s alleged business dealings when he served on the board of Ukrainian energy company Burisma. Top Republicans have acknowledged they cannot confirm whether the information is true.
...
In the four-page document, the confidential informant claims to have been involved in various meetings some years earlier, in 2015 or 2016, with officials from the Burisma energy company looking to do business in the United States. The informant claims being told by Burisma officials about their relationship and dealings with Hunter Biden.

https://apnews.com/article/hunter-biden-burisma-ukraine-congress-grassley-d373e943f3b9e860843626b4355e5321

How is an unsupported claim from a person analogous to a government-related entity having a record of your spending?

[MiHale]

20. They do now...

“Already checked into it. He used his Master Card. CCTV in the bar showed he was having a little “discussion” with a truly gorgeous dinner companion about being seen in the bar.”

[Grins]

25. They aready know! Going back to when paper checks were the rule. NM

[paleotn]

30. Did you actually think all that was private before this Fed initiative?

Unless you use cash always, are paid in cash and have no bank accounts, there’s a trail.

[ToxMarz]

32. It's no different than usi g a check, debit card or credit card, PayPal or Venmo

Those all go through the Federal Reserve system. It's anither more expedient method . There will still be the same channels to 'hide' your transactions as before.

[DBoon]

40. So would Paypal and Venmo

They would very quickly hand this data over to the likes of Cambridge Analytics for a small fee.

[DENVERPOPS]

44. Not if you are the wealthy up to the Uber Rich!!!!!!!!!!

The offshoring of money is accompanied by credit cards issued to U.S. Citizens by the off shore banks. Congress/IRS years ago passed a law that the U.S. Government and IRS could not access the off shore banks credit card records........

Cute, huh.............

[FakeNoose]

45. That's OK with me - the US banks must follow US laws

If they don't do things by the book, there are protections and repercussions all down the line.
US banking is the one system we can trust.

All the "Paypals" out there are set up to take whatever they can get away with.

[jojog]

4. Will they allow legal weed businesses participate

How about payment to Only Fams or Porn Hub

[GoneOffShore]

6. Huzzah - About bloody time.

[Bayard]

17. I'm sure they already monitor Paypal and the like,

(and find me such a boring consumer!) This looks like its just removing the middle man.

[The Mouth]

19. Give me cash, anyday

Good, old dead president's pictures.

Nobody needs to know my finances.

I'd be happier paid in cash, and dealing in nothing but.

[paleotn]

31. The suitcases get heavy sometimes.

And are easily stolen.

[The Mouth]

39. Meh

I'll take those risks over the risk of any other person or entity knowing what the hell I do with my money (or anything else).

[brooklynite]

41. Let me suggest you move to Uzbekistan...

The largest bill is the equivalent of $2.50 and digital banking doesn't exist.

[EX500rider]

55. HA! I was a temporary millionaire in Tashkent when I traded in $200US for some Uzek Sum

[Oopsie Daisy]

21. Will this be better-than, faster-than, more-secure than Zelle?

Will this be better-than, faster-than, more-secure than Zelle? Cheaper-than? More ubiquitous? Easier-than?

https://en.wikipedia.org/wiki/Zelle_(payment_service)

I don't trust Paypal and I view them with the same contempt that I view payday lenders and check-cashing services that prey on vulnerable and underserved communities. --- Maybe this will lead to USPS offering basic banking services.

[EX500rider]

56. Can't be faster, I am standing next to some of my customers when they Zelle me, takes about a second

[Sanity Claws]

24. They've had this type of thing in Canada for years

Glad we are finally getting it here.

[Wednesdays]

26. So, 35 banks?

Out how many HUNDREDS of banks in the country?


My relatively small bank won't be a part of this for a very long time.

Still, don't get me wrong, it's a very good development. Just wake me when it becomes widespread.

[Major Nikon]

34. Yesterday was the soft launch

I'm quite sure everything is going to get implemented gradually so as to resolve any issues before it becomes widespread. I can't imagine every financial institution not participating as the costs are reported to be only 20% of existing transfer services.

[twodogsbarking]

27. I remember cash. No fee, no bullshit.

[Major Nikon]

35. 9 out of 10 drug dealers prefer cash

One was high as fuck and mumbled an incoherent answer.

[IronLionZion]

28. Good to have more options

Many Americans don't know the US is far behind on many banking technologies.

[Grins]

29. I refuse to use Venmo or PayPal because it's founder is Peter Thiel

Peter Thiel being the crackpot billionaire who backs Trump and the rest of the Rethugs, who took down Gawker in spite, gave $10-MILLION very early to J.D. Vance's campaign, funded the pro-Trump and laughably-named dating app "The Right Stuff," whose co-founders include former Trump hatchet-man, Johnny McEntee, and the sister of former White House press secretary Kayleigh McEnany. Not to leave out he was the guy that started the run on Silicon Valley Bank.

I use Zelle, owned by the banks themselves, and have had ZERO problems with it.

[AllyCat]

43. Where can you use Zelle? I've yet to see anyone who accepts it.

Apple Cash my kids.

[XorXor]

47. All the major banks seem to support it.

I have CapitalOne and I've sent & received money from people using Bank of America and Wells Fargo. The bank apps and webpages allow you to setup zelle and send money. I have also have a rarely used Chime bank account, but they don't allow for zelle transfers, though. Someone I know who has some other online bank called SoFi (I think) said he couldn't send via Zelle either.

[AllyCat]

52. Oh, so it's only for sending cash, not purchases.

My credit union uses Zelle. Might try it.

[TygrBright]

33. Simply this: The Federal government is ultimately more accountable than any private corporation. n/t

[AllyCat]

42. But "the Fed" is not the government, is it?

[brooklynite]

49. That's a popular right wing conspiracy theory.

Who appoints and Fed Chair and Board of Governors?

[AllyCat]

51. I didn't even think it was RW. Felt like I read it here even.

But, that makes sense that the chair is appointed. Whatever. I think this is a good move.

[brooklynite]

54. Its an anti-establishment meme...

...primarily right wing, but also left wing populism.

https://www.sanders.senate.gov/press-releases/sanders-supports-audit-the-fed-bill/

[FakeNoose]

36. Oh my gosh, what a difference this will make

I can remember back to the late 1980's. I lived in northern New Jersey and worked in Manhattan. Got paid my salary every other week - with a check from Banker's Trust in Manhattan. So I had to go to the BT bank in Manhattan and cash my check, walk around with cash all day until I could deposit it in my New Jersey bank. OR I could take the check to deposit in my NJ bank and wait EIGHT DAYS for it to clear!

I know things are way better than that now, and I'm talking about the days before direct deposit. But still - eight days to clear a standard paycheck? All that means is the banks were playing the float. And they did it to everyone back in those days.

[Wonder Why]

46. I print my own cash. So much easier. whenever I run low, I pull out the old plates

and start up my printing press.

If the North Koreans can do that with U.S. money, why can't I?

You'll find my money everywhere. It has my picture on it instead of Hamilton - you know, the guy that wrote an autobiographical play a few years ago.

[XorXor]

48. Sweet. I had no idea that was an option.

I'm going to have to look into that.

[AllyCat]

53. LOL!

[Deminpenn]

50. This is excellent news

I read a Yahoo! news story about this new option. That story explained that cash apps like zelle really have to do a multi-step process of get money, hold money, transfer money back and forth. It's not instantaneous like most people think.

I'd much rather have a Fed developed cash app than anything else.