What's stopping them is a simple question: who are you transferring the money to?
A lot of banks allow customers to do instant transfers between customers of that bank, but for this to be a killer feature, you have to have enough customers that this is significant. In NYC, Chase is almost there--they have enough of a share of NYC that it's worth asking if the person you're transferring to has Chase so you can use their instant transfer system.
But the vast majority of transactions are still between customers of different banks, and there's not much reason for a bank to process a competitor's payment quickly--it doesn't give you a competitive advantage, while processing slowly allows you to collect interest on the money while it's in transit.
> But the vast majority of transactions are still between customers of different banks, and there's not much reason for a bank to process a competitor's payment quickly
Zelle sounds great, and I really want it to work, but my experiences with it so far have been really frustrating.
3 separate experiences:
1. My friend was sending me $750, and had to structure it as 4 separate payments each 24 hours apart due to some sending limit that either Zelle or his bank imposes.
2. I sent my brother money, and for whatever reason he had trouble accepting the transfer, so I had to resend it a week later when it failed.
3. Someone sent money to me, and it was my first time using Zelle, so I had to login to my bank after clicking a link in a text. But after logging in, nothing happened... It didn't tell me where the funds went, and they weren't in my account. 3 days later they magically showed up. I think the transaction was pending??
Do you really have to ask? Is it a separate system or something?
In Australia, you must pay using the normal way (which is pretty much always free), and if it’s the same bank it’s processed instantly and if it’s not it’s processed generally overnight.
Pretty much everybody’s moving to a new real-time payments platform in the next few months too, so it should just always be instant for domestic transfers.
well, to transfer money between banks requires the use of the ACH system (or a wire transfer), but looking at how ACH works https://www.nacha.org/ach-network it essentially requires that your money get processed by what is essentially the federal reserve's mainframe computers. Given that these machines only process transactions during government business hours, such a delay is reasonable.
A lot of banks allow customers to do instant transfers between customers of that bank, but for this to be a killer feature, you have to have enough customers that this is significant. In NYC, Chase is almost there--they have enough of a share of NYC that it's worth asking if the person you're transferring to has Chase so you can use their instant transfer system.
But the vast majority of transactions are still between customers of different banks, and there's not much reason for a bank to process a competitor's payment quickly--it doesn't give you a competitive advantage, while processing slowly allows you to collect interest on the money while it's in transit.